The nine-year, principal-protected bond provides Nuveen, T Rowe Price, Velliv Pension, Mackenzie Investments and other investors with a coupon linked to the generation of carbon removal units from reforestation projects in Brazil’s Amazon rainforest. The World Bank says it is the largest outcome bond and the first to link financial returns to carbon removed from the atmosphere, rather than from avoided emissions.
Of the proceeds, $36 million will go to Brazilian carbon removal startup Mombak for acquisitions and partnerships with landowners in the Amazon rainforest on reforestation projects.
Mombak last year raised $100 million for the Amazon Reforestation Fund for projects that generate high-quality carbon removal credits, improve soil quality, enhance biodiversity and create local jobs (see, “Reforesting the Amazon”).
