CASE STUDY

Wildlife Conservation Bond mobilizes private
capital to protect critically endangered rhinos
The World Bank’s USD 150 million
Wildlife Conservation Bond (WCB) is a
first-of-its-kind outcome-based bondthatsupports
thefinancing
ofconservation activities, and together
with financing from the Global
Environment Facility (GEF) transfers
project risk from donors to investors.
The transaction mobilizes private capital to facilitate
financing of black rhino conservation activities at two
protected areas in South Africa, Addo Elephant National
Park (AENP) and Great Fish River Nature Reserve (GFRNR).

BackgroundConservation of biodiversity and ecosystems faces anestimated annual financing gap of up to $800 billion.
Financial instruments that can crowd in additional private
capital for conservation are urgently needed.
Rhinos play a crucial role in Africa’s wild ecosystems, whichis critical to other species and to the national economy ofSouth Africa through tourism and jobs. However, blackrhinos are critically endangered due to poaching and lossof habitat. The black rhino population numbers at AENP
and GFRNR represent a significant portion of South Africa’s
and the global black rhino population. The parks have astrong track record of rhino growth in recent years;
however, further conservation investments are required tosecure and grow this important black rhino population.

Objectives of the WCB
The objective of the WCB project is to secure and grow theblack rhino population, support over 2,000 jobs for the local
community and improve the management of a 153,000hectare area from the project’s conservation activities.
Importantly, the WCB transaction tests a new model for
conservation financing where investors accept project
outcome risk in return for a potential payout if the projectis successful. The structure creates an opportunity for

private investment in conservation, supported by soundquantifiable metrics and models.

Financial Solution
The WCB is a 5-year US dollar denominated principalprotected World Bank Sustainable Development Bond.
Investors in the WCB do not receive coupon payments.
Instead, the World Bank will make conservation investment
payments to the two protected conservation sites – AENP
and GFRNR, to fund rhino conservation activities.
Investors stand to receive a success payment at maturity,
linked to the growth rate of the black rhino population at
the two parks, paid by the World Bank with funds provided
by the GEF.
The rhino growth rate will be calculated and verified byindependent parties, Conservation Alpha and theZoological Society of London respectively, over the bondterm. The financial structure was developed with Credit
Suisse and builds on earlier preparatory work at the parks.
Irrespective of the rhino growth rate and project
implementation risk, investors will receive their principal
investment back at maturity from the World Bank,
providing investors a AAA-rated investment with thepotential for an additional return if conservation outcomesare achieved.

CASE STUDY
OutcomeWorld Bank’s Role

The WCB is a first of its kind structured bond, that tests a
new model of conservation financing, linking theinvestment return under a bond issuance to conservation
performance.

The World Bank (International Bank for Reconstruction andDevelopment or IBRD) is the issuer of the WCB. World Bank
Treasury led the structuring, documentation, marketing,and execution of the bond transaction, and coordinatedthe activities of numerous external service providers. Thistransaction benefited from the World Bank’s large
institutional
investor
baseandbond
issuance
infrastructure.

Key innovations of the WCB include:• Facilitating access to additional financing that
South African parks would otherwise not haveaccess to• Passing project implementation risk to capital
market investors with donors paying only on
successful outcome• Deployment of advanced conservation monitoring,verification and quantification tools in connection
with a bond transaction

The World Bank is the GEF’s trustee and provides
administrative services for its operation. The World Bank’s
Environment, Natural Resources, and Blue Economy Global
Practice project team is an implementing agency of the GEF
and will manage the WCB project, providing
implementation support to the parks and monitoring andassessing
project
progressandresults.

Transaction Structure

Transaction SummarySize

USD 150 million

Issue Price
Issue Date

94.84 %March 23, 2022

Maturity Date

March 31, 2027

Sole Structurer
Joint Bookrunners

Credit Suisse
Credit Suisse and Citi

Conservation
No payment of interest to investors on the bonds. Instead, IBRD will make
Investment Payment conservation investment payments to the parks (subject to certain payment
suspension events), totaling ZAR 152 million over the five years.
Redemption Payment Redemption at ParConservation Success A success payment may be paid to investors at maturity, determined as a
Paymentfunction of the rhino population growth rate in AENP and GFRNR over theterm of the bonds, as calculated and verified by Conservation Alpha and theZoological Society of London respectively. The maximum conservation
success payment is USD 13.76 million.

Contact: Michael Bennett, Manager, Market Solutions & Structured Finance, The World Bank Treasury
 mbennett1@worldbank.org  +1 (202) 458 5099 | Elisson Wright, Senior Environmental Finance Specialist, Environment,
1225 Connecticut Avenue NW,
Natural Resources & Blue Economy  ewright1@worldbank.org  +1 (202) 473 3046
Washington, D.C., 20433, U.S.A.