The World Bank has issued the first-ever wildlife bond, worth $150 million, to be used to revive the population of rhinoceros in South Africa. The success of the bond and programme may result in the World Bank issuing similar bonds for conservation efforts in Kenya and for other species like lions, tigers, gorillas and orangutans.
The World Bank has issued the world’s first wildlife bond, the money from which will be used to resuscitate the population of rhinoceros in South Africa. Of the total $150 million, the money will be partly spent on two South African reserves, the Addo Elephant National Park (AENP) and the Great Fish River Nature Reserve (GFRNR), which will aim to use the sum for the conservation of black rhinoceros in the sanctuaries.
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“The Wildlife Conservation Bond is a first-of-its-kind, outcome-based, financial instrument that channels investments to achieve conservation outcomes -- measured in this case by an increase in black rhino populations,” the World Bank said in the statement.
“The WCB model provides a new blueprint for the way conservation is financed and has the potential to be a key enabling tool for the delivery of the post-2020 Global Biodiversity Framework,” added Oliver Withers, Biodiversity Lead within Global Sustainability at Credit Suisse.
Rhinos once covered an expansive habitat that stretched from Europe, Asia, to Africa. Today, due to habitat loss and excessive poaching, only five species exist that are found in South Africa, Borneo and Sumatra, Namibia, Eastern Himalayas, and Coastal East Africa. Most of the 27,000 rhinos still remaining in the wild are the white rhino, while the Javan rhino, the Sumatran rhino and the Black rhino are critically endangered and the Indian rhino is vulnerable. This is a far cry from the nearly half a million rhinos that roamed the wild at the start of 20th century.
What will the bond do?
Issued by the International Bank for Reconstruction and Development (IBRD), the Wildlife Conservation Bond (WCB) was issued to support South Africa’s conservation efforts to save critically endangered species like the black rhino.
Bonds are issued by governments, companies and organisations to raise money for different purposes at cheaper rates than commercial loans. The money raised by the WCB bond will be used by the AENP and the GFRNR for conservation efforts, which are both operated by the Eastern Cape Parks and Tourism Agency (ECPTA).
Investors will receive returns based on the amount of increase in the black rhino population in the two reserves. The total issue price was $150 million, with investors purchasing the bond at 94.8 percent of that value. The bond will mature in five years when investors can seek to gain a maximum Conservation Success Payment is $13.76 million depending on the increase in rhino population and be redeemed at their face value. The bond was structured by Credit Suisse, and Citibank Group is the joint bookrunner.
The population levels will be verified by the Zoological Society of London and the bonds will be listed on the Luxembourg Stock Exchange.
"This bond will significantly increase the funding for the Great Fish River Nature Reserve, which is much needed to scale up activities to protect and grow our rhino populations and increase benefits to local communities and the economy. Funding will support increased staffing and training, improved national and regional coordination, as well as investments in equipment, infrastructure, and technology,” said Vuyani Dayimani, CEO of ECPTA.
“This bond will support important conservation efforts at Addo Elephant National Park and help fill funding gaps due to a reduction in tourism due to the COVID-19 pandemic,” said Dumisani Dlamini, Acting CEO for SANParks.
Addo is a 1,640-sq-km reserve, while Great Fish is a 450-sq-km park. Both are in South Africa’s Eastern Cape province and are run by the South African government. The success of the bond and programme may result in the World Bank issuing similar bonds for conservation efforts in Kenya and for other species like lions, tigers, gorillas and orangutans.
(Edited by : Thomas Abraham)