The World Bank this year plans to float a US$ 45 Million Bond that seeks to generate cash to increase the population of South Africa’s black rhino, considered an endangered species.
The five-year financial instrument will be the world’s first wildlife conservation bond, with the World Bank aiming to sell it by the middle of 2021.
World Bank Bond returns
Returns to investors will depend on the growth rate of the animals in two South African reserves.
The zoological society of London is driving this conservation effort under the Rhino Impact Investment Project. (RIIP)
If successful, this plan is expected to roll out to Kenya, which also has endangered black rhinos, lions, tigers, gorillas and orangutans, said a document by RIIP.
This conservation bond provides investors with a return for their support to conservation with an opportunity to re-invest in new projects, especially those that are funded mainly by well-wishers.
This wildlife conservation bond intends to use the World Bank, International Bank for Reconstruction and Development IBRD AAA-rated bond while Credit Suisse Group AG is advising on the project.
Investors in the rhino bond will get back their money and any further payments depending on how rhino numbers turn out after the five years.
Available figures indicate that Black rhino numbers had dropped to about 5,500 from 65,000 in 1970. These animals are found in four African countries, including South Africa.
Rhinos are endangered due to illegal poaching to satisfy demand in China and Vietnam for the powder from their horns that is believed to be a cure for cancer and low libido.
After South Africa, the World Bank initiative is expected to pick Lewa Borana and Ol Pejeta Conservancies and possibly Tsavo West National Park for the rhino conservation project.
While rhino security is a first, sustainable bonds have been used to finance various outcomes, from marine and fisheries projects in Seychelles to girls education in rural India.