The International Finance Corporation (IFC) has updated its green bonds framework to allow the bonds to also fund biodiversity, ocean, and water protection, opening a new pathway for project finance.
By mid-2022, IFC’s green bonds programme had issued 178 bonds worth $10.55 billion in 20 currencies since its launch in 2010.
Those funds have gone towards climate finance, mostly renewable energy and energy efficiency, but the organisation has now integrated its recently finalised reference guides for biodiversity and the blue economy into the programme, it said this week.
“Nature, underpinned by biologically diverse ecosystems, plays a critical role for national economies and people’s livelihoods and health, and is a key component of climate change mitigation, resilience, and adaptation,” the updated programme guidelines said.
“There is a growing recognition of the need to transition to sustainable business models that protect biodiversity and ecosystem services.”
IFC has made three basic biodiversity project types eligible for green bond funding: activities that seek to generate biodiversity co-benefits within established business operations, investment in biodiversity or nature restoration as the primary objective, and in nature-based activities that seek to conserve, enhance, and restore ecosystems and biodiversity.
The list of eligible activities for ocean and water is longer, and includes water supply and sanitation, ocean-friendly products, chemicals, plastics, sustainable shipping and port logistics, fisheries, aquaculture, seafood value chains, marine ecosystem restoration, sustainable tourism services, and ocean-friendly offshore renewable energy.
“Blue finance helps address pressing challenges by contributing to the improved livelihood and health of marine and freshwater ecosystems through financing water conservation and reducing harm to or creating co-benefits for oceans and freshwater,” IFC said.
“The ocean economy is expected to double to $3 trillion by 2030 (employing 40 million people) as compared to 2010. Innovative financing solutions are key to enhancing ocean and coastal preservation and increasing clean water resources, and blue finance has a huge potential to help realise these goals.”
By Stian Reklev – stian@carbon-pulse.com
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