World Bank And Citi Unveil $100M Bond Tackling Waste


The World Bank and Citi have jointly launched a $100 million bond designed to address the issue of waste, with repayments influenced by the sale of plastic and carbon offset credits. This innovative bond, priced late on Wednesday, is earmarked for funding plastics collection and recycling projects in Ghana and Indonesia. Its unique structure allows investors to receive their principal back at the end of the seven-year term, guaranteed by the World Bank, coupled with a minimum interest payment of 1.75%.

What sets this bond apart is its association with the sale of plastic and carbon offset credits from two recycling projects. These credits are sold to major corporations utilising significant amounts of plastic, with each plastic offset credit theoretically representing a tonne of plastic collected or recycled. Investors in the bond aspire to achieve single-A credit returns with triple-A protection, anticipating that the total return from this bond could surpass similar World Bank debt offerings.

This initiative not only reflects a growing trend of adopting unconventional debt structures for environmental causes but also demonstrates investors’ willingness to engage in innovative financial instruments to align with sustainable objectives. The bond follows previous initiatives like the “rhino bond” for wildlife conservation and emissions reduction-linked bonds, marking a significant step in fostering sustainable finance.

The above is for educational purposes only and does not constitute advice. You should always contact your advisor for a personal consultation.

*No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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