World Bank and Amazon Launch $120 Million Carbon Credit Bond for Ecosystem Restoration in South Africa
The World Bank has issued a $120 million bond in partnership with Amazon to rehabilitate ecosystems in South Africa. This 14-year bond's returns are linked to carbon credits generated from restoring overgrazed land, focusing on the Spekboom plant.
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The World Bank has partnered with Amazon.com Inc. to issue a $120 million bond aimed at ecosystem rehabilitation in South Africa's Eastern Cape Province. This 14-year bond offers returns tied to carbon credits produced by restoring land damaged by overgrazing, with Amazon purchasing a substantial share of the credits generated.
The bond features a 2.41% interest rate, and investors are expected to receive returns exceeding typical World Bank bond yields. Proceeds will support the restoration of Spekboom thickets, crucial for carbon sequestration and soil retention.
The first phase targets 10,000 hectares, with plans for a 50,000-hectare expansion. This initiative is part of the World Bank's strategy to attract private investment in biodiversity and sustainability projects, reflecting a growing trend in outcome-based financing.
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