ImpactAlpha, September 3 – Swedish pension fund AP1, asset manager Storebrand, and bond funds from two Nordic banks—SEB and Swedbank—are backing a one billion Swedish krona ($110 million) bond to finance initiatives aligned with two water-related Sustainable Development Goals.
The World Bank has financed $37 billion in water-related projects in developing countries, and partners with public sector actors to improve marine and coastal management and protection. But with only a handful of impact funds focused on water and ocean sustainability, the bond is the first of the World Bank’s newly launched $3 billion bond initiative to encourage private capital to support sustainable water management, clean water, and sanitation (SDG 6) and sustainable use of ocean and marine resources (SDG 14).
“The demand for this bond shows that investors are aware of the critical need to protect water…and to ensure a sustainable future,” the World Bank’s Arunma Oteh said in a statement. “This demonstrates SEB’s continued leadership on sustainability, and is reminiscent of our partnership with SEB and Swedish investors 10 years ago, in issuing the first labeled green bond.”
It’s perhaps unsurprising that Swedish institutional investors would be first in line to back the bond initiative. Swedish investors, along with Dutch investors, have been at the forefront of SDG-related finance and new impact finance schemes generally. AP1 recently backed BlackRock’s emerging markets impact fund, while pension fund AP2 has backed TPG’s Rise Fund. A third pension, Alecta, has committed $200 million to a Dutch SDG fund, the NN-FMO Emerging Markets Loans Fund.