In a world first, the International Financial Corporation
(IFC), an arm of the World Bank, has issued a so-called forest
The $152 million instrument, which priced on Monday, is
designed with the express purpose of reducing deforestation and
encouraging further private sector investment in low-carbon
projects. The IFC’s presence on the deal is
important for that reason.
The world loses around 13.6 million acres of
tropical forest per yearBacked by Australian
commodities firm BHP Billiton, the deal is listed in London.
Investors have the option to receive coupons either in cash, in
the form of carbon credits generated by the forest, or a
combination of the two, offering a potentially more lucrative
option depending on the state of the market.
"The idea was to create a tool that’s familiar to
international investors, but would also solve the conservation
issue. To some extent it’s very simple in