The World Bank to launch world's first sustainable water bond

The World Bank has revealed plans to launch the world's first series of bonds aimed at advancing water and ocean stewardship and has priced the first bond at SEK1bn (£85m).

The first seven-year bond was priced at SEK1bn (£85m)

The first seven-year bond was priced at SEK1bn (£85m)

The seven-year bond, announced on Friday (31 August), is the first in a new series of Sustainable Development Bonds that aim to raise at least $3bn for projects that improve sanitation, water access and marine protection efforts.

The series of bonds form part of The World Bank’s ongoing efforts to engage investors with the United Nations’ (UN) Sustainable Development Goals (SDGs). Specifically, they have been created to encourage investment in achieving the aims of SDG6, clean water and sanitation, and SDG14, life below water.

The World Bank’s vice president Arunma Oteh said the Bank was able to price the first bond so quickly as interest in achieving the aims of the SDGs is rapidly growing among investors.

"We are very pleased to price this Sustainable Development Bond, so soon after we announced our new initiative,” Oteh said. “The demand for this bond shows that investors are aware of the critical need to protect water, our most precious resource, and to ensure a sustainable future.” 

The announcement comes shortly after a report from the Global Water Intelligence (GWI) revealed that total worldwide investments into water infrastructure must reach £342bn ($449bn) each year between 2018 and 2030 if SDG6 and SDG14 are to be achieved on time.

It also comes at a time when the green finance market is growing exponentially, with the green bonds market growing by a staggering 78% between 2016 and 2017, for example. Just last week, SSE issued a green bond worth €650m, confirming the big six supplier as the largest issuer of green bonds from the UK corporate sector.

Troubled waters?

The news from The World Bank came as more than 3,000 business representatives, politicians and practitioners met in Stockholm for World Water Week – an annual event which serves to highlight the good work being done to promote water stewardship and the challenges which are yet to be overcome in this area.

From a business perspective, research released by climate disclosure organisation CDP revealed that the number of large companies pledging to measure, manage and report their water risks has doubled over the last three years.

Of these companies, almost a quarter (478) said that implementing water efficiency measures presented new business opportunities and benefits. As a result, the business case for disclosure and action on water is becoming clearer.

However, the UN estimates that 1.2 billion people, or one-fifth of the world’s population, are still suffering from the adverse effects of water scarcity. Similarly, The Global Water Institute estimates that 700 million people in 43 countries suffer from the effects of water scarcity, with UNESCO predicting that this figure will rise to 1.8 billion by 2025 if no action is taken.

To mark World Water Week, edie recently released a feature exploring seven ways that the business community is addressing the global challenges of water scarcity, water stress and sanitation. You can read the article in full here.

Sarah George


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green finance | water | world water week

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