World Bank Amazon Reforestation-Linked BondQUESTIONS & ANSWERS
How does the bond work?
The Amazon Reforestation-Linked Bond is a USD 225 million 9-year principal
protected outcome bond issued by the International Bank for Reconstruction andDevelopment (“IBRD” or the “World Bank”) with a unique feature, whereby the returnfor investors is linked to the issuance and monetization of Carbon Removal Units(“CRU”) from the reforestation of degraded lands in the Amazon rainforest regions ofBrazil.
Investors earn a fixed guaranteed coupon that is lower than the ordinary coupon
earned in regular World Bank bonds of similar maturity. The foregone coupons ofapproximately USD 36 million (the differential between the World Bank ordinary
coupon and the guaranteed coupon) are channeled to a project developer - Mombak(through HSBC) to support reforestation projects. In return, in addition to the smaller
fixed coupon, investors receive a variable coupon linked to the value of the CRUs – if
any – generated and monetized by the reforestation projects. The bond will offer
investors an enhancement over the yield of regular World Bank issuance of similar
maturity if the projects perform as expected.
Who is the issuer of the bond?
The bond is issued by the International Bank for Reconstruction and Development(“IBRD” or the “World Bank”).
Will the bond be listed?
The Bond will be listed on the Luxembourg Stock Exchange.
Who are the investors?

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A variety of institutional investors from around the world purchased the bond.
Certain lead investors are quoted in the Press Release, and, when the bond settles
August 20, 2024, we expect to provide additional quotes from a number of otherinvestors.
How will the 225 million bond proceeds be used?
The bond issuance proceeds of USD 225 million will be used for the World Bank’s
sustainable development activities. World Bank bonds support the financing of a
combination of green and social, i.e., “sustainable development” projects, programs,and activities in IBRD member countries. See IBRD’s Sustainable Development Bond
Framework for examples of eligible projects, programs, and activities.
What is the maximum return investors can expect?
The bond was issued at par and provides investors with a minimum guaranteedannual return of approx. 1.745%. In addition, if the projects perform as expected (interms of generating and monetizing the expected value of CRUs) investors can expect
to earn up to a total annualized yield of 4.362%.
Are investors exposed to carbon credit price risk?
Bond investors are not expected to be exposed to carbon credit price risk since theCRU Linked Interest Amounts payable to investors are entirely driven by the numberof CRUs issued and monetized through a carbon removal purchase agreement withMicrosoft. However, if the Microsoft contract were to be terminated for any reason,
thereafter the investors would be exposed to carbon price risk.
What risks are investors in the bond exposed to?
The return on the bond could be lower than the return on a conventional IBRD bondif fewer CRUs than expected are issued by the projects and transferred to Microsoft,if either Mombak or Microsoft fail to perform their obligations under the carbon
removal purchase agreement, the carbon removal purchase agreement isterminated or if HSBC fails to perform its obligations in the transaction. These risks
and other risks investors are exposed to are explained in more detail in the bonddocumentation under the section titled “Additional Risk Factors”.
Irrespective of the CRUs issued and monetized by the projects, investors will receive
their principal investment back at maturity plus a minimum return from the World
Bank, providing investors a highly rated investment with the potential for an
additional return if the projects are successful.

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What are CRUs?
“CRUs” represent a verified carbon removal unit, with each unit representing theremoval of one tone of carbon dioxide equivalent (CO2e) achieved by the projects.
How will CRUs be generated by the projects and who is responsible for theverification?
CRUs will be generated by reforesting degraded land: once planted, trees will growand capture carbon from the atmosphere, storing it in wood. The amount of CO2esequestered will be assessed through innovative and dynamic methodologies byMombak and verified by accredited third parties as specified by an independent
Carbon Credit Registry such as Verra or Gold Standard.
Will the bond give CRUs to investors?
No. The bond will pay investors a variable coupon from time to time linked to thenumber of CRUs generated and sold by the projects (the “CRU Linked InterestAmount”).
How does IBRD hedge the CRU exposure?
IBRD has entered into a Forward Flow Agreement (FFA) with HSBC to hedge the CRU
exposure. Under the FFA, subject to the achievement of milestones by Mombak, IBRD
will make payments to HSBC of up to approximately USD 36 million (the differential
between the fixed rate coupon on the bond and an ordinary IBRD coupon) to support
Mombak’s projects. In return, under the FFA, HSBC will pay IBRD an amountequivalent to the CRU Linked Interest Amount due to the bond investors.
Who will buy the CRUs?
Prior to the issuance of the Amazon Reforestation-Linked Bond, Mombak enteredinto a carbon removal purchase agreement with Microsoft to purchase the CRUs. A
portion of the revenue generated from the sale of the CRUs to Microsoft will be paid
to the bond holders in the form of the CRU Linked Interest Amount.
Who is the project developer?
Mombak, a Brazilian Limited Liability Company. Mombak develops nativereforestation projects for the purpose of removing carbon dioxide from theatmosphere. 1 Mombak, acquires through a Brazilian fund (called The Amazon
Reforestation Fund Fundo de Investimento em Participações Multiestratégia) orTHE PROJECTS ARE NOT FINANCED BYIBRD AND THEREFORE IBRD’S POLICIES AND PROCEDURES
RELATED TO PROJECTS FINANCED DO NOT APPLYTO THE PROJECTS.

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Official Use Onlyenters into partnerships with landowners of deforested land in the Amazon toreforest these areas with native tree species to rebuild native biodiverse forests.
How are disbursements of the foregone coupons made to Mombak?
Subject to the achievement of agreed milestones, Mombak will receive (via HSBC) up
to USD 36 million across 11 expected disbursements between August 20, 2024 andDecember, 31 2026. Any undisbursed amounts will be returned to bond investors inJanuary 2027.
What is the potential for replication of similar outcome-linked bondstructures?
Mobilizing private capital to support projects that aim to abate CO2e emissions
and/or capture carbon from the atmosphere is critical to achieving the world’s
climate targets. Furthermore, by reforesting degraded land, similar efforts help
protect and preserve ecosystems that have been severely impacted by mass
deforestation. These projects have potential future revenue from CRU sales but often
lack the financing required to get off the ground or to scale. Outcome bonds like theAmazon Reforestation-Linked Bond can help such projects raise needed funding
from capital markets by securitizing future carbon credit sales revenue. These bonds
blend project risk with triple-A principal protection provided by the World Bank, andare listed, tradable securities of a size large enough to interest institutional investors.
Disclaimer
Net proceeds of the bonds described herein are not committed or earmarked for lending
to, or financing of, any particular World Bank projects or programs. Payments on thebonds are not funded by any particular World Bank project or program.
This Q&A is not an offer for sale of securities of the International Bank for Reconstruction
and Development ("IBRD"), also known in the capital markets as "World Bank". Anyoffering of World Bank securities will take place solely on the basis of the relevant offering
documentation including, but not limited to, the prospectus, term sheet and/or final terms,
as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject
to restrictions under the laws of several countries. World Bank securities may not be
offered or sold except in compliance with all such laws. The World Bank Sustainable
Development Bond Framework, the World Bank’s Sustainable Development Bond Impact
Report, and the information set forth therein are not a part of, or incorporated byreference into, the offering documentation.

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