Wildlife Conservation Bond Boosts South Africa’s Efforts to Protect Black Rhinos and Support Local Communities

PRETORIA The World Bank (International Bank for Reconstruction and Development, IBRD) today priced the Wildlife Conservation Bond (WCB) in support of South Africa’s efforts to conserve endangered species. Also known as the “Rhino Bond,” this five-year $150 million Sustainable Development Bond includes a potential performance payment from the Global Environment Facility (GEF), which will contribute to protecting and increasing black rhino populations in two protected areas in South Africa, the Addo Elephant National Park (AENP) and the Great Fish River Nature Reserve (GFRNR). AENP is managed by the South African National Parks (SANParks) and GFRNR is managed by Eastern Cape Parks and Tourism Agency (ECPTA).

The WCB 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. Rhinos are considered an umbrella species that play a crucial role in shaping entire ecosystems on which countless other species depend. Through the WCB, investors are supporting the financing of activities to protect and grow a critically endangered species with clear conservation targets, contributing directly to biodiversity, and bringing jobs to local communities through the creation of conservation-related employment in a rural and underserved region of South Africa.

“The Rhino Bond is a groundbreaking approach to enabling private sector investment in global public goods — in this case biodiversity conservation, a key global development challenge,” said World Bank Group President David Malpass“The pay-for-success financial structure protects an endangered species and strengthens South Africa’s conservation efforts by leveraging the World Bank’s infrastructure and track record in capital markets. Importantly, it can be replicated and scaled to channel more private capital for other conservation and climate actions and development objectives around the world.”

Investors in the WCB will not receive coupon payments on the bond. Instead, the issuer will make conservation investment payments to finance rhino conservation activities at the two parks. If successful, as measured by the rhino growth rate independently calculated by Conservation Alpha and verified by the Zoological Society of London, investors will receive a success payment at maturity, paid by the IBRD with funds provided by a performance-based grant from the GEF, in addition to principal redemption of the bond. This represents a new approach in conservation financing that passes project risks to capital market investors and allows donors to pay for conservation outcomes. Credit Suisse was the sole structurer and joint bookrunner with Citibank.

“We are proud to be the lead investor in this innovative transaction that provided not only attractive total return potential, but also the direct and measurable outcomes we look for under our proprietary Impact Framework.  We are especially hopeful that this type of public-private partnership can serve as a template for future transactions to help improve biodiversity globally,” said Stephen M. Liberatore, Head of ESG/Impact – Global Fixed Income at Nuveen.

“This innovative conservation bond, which the Global Environment Facility is delighted to support, opens a new avenue for financing biodiversity protection at a critically important time. This is a great example of how capital markets can meet both investor and conservation priorities,” said Carlos Manuel Rodriguez, GEF CEO and Chairperson. “The GEF’s financial backing for this bond gave it the risk/return profile that investors needed to enter the biodiversity space, and I am confident that their engagement will only grow from here, with future conservation bonds that benefit other umbrella species and their ecosystems.”

Rhino protection helps other species that share their habitat. This ecosystem contributes to South Africa’s national economy through tourism, job creation, and as an important source of foreign exchange. However, black rhinos are critically endangered mainly due to poaching and habitat loss.

“As South Africa we are excited to be at the forefront of an innovative new financial instrument aimed at boosting our efforts to protect the world’s largest rhino population. We would like to acknowledge and express our appreciation for the considerable effort by numerous role players over the last few years that has resulted in this much needed injection of funding into the biodiversity sector. We are confident that this will assist in increasing the rhino growth rate and stimulate the development of additional novel market-based mechanisms to support the objectives of the New Deal for People with Nature. South Africa is committed to securing nature’s contribution to people through well-managed and expanding Conservation Areas that contribute to inclusive rural economic growth in thriving Biodiversity Economy Nodes,” said Minister Barbara Creecy, the Minister of Forestry, Fisheries and the Environment, South Africa.     

Conservation investment payments from the WCB allow South Africa to build on established and successful rhino conservation efforts at AENP and GFRNR. These parks were selected for this pilot transaction based on their ecological, managerial, and financial capacity to achieve rhino conservation outcomes. The conservation efforts at these parks strengthen ecosystem services like clean water and habitats for pollinators that serve the local citrus industry.

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. This project is an example of our continued efforts to foster innovation, best practices, and unlock new revenue streams to promote a system of sustainable national parks that contribute to the South African biodiversity economy. The funding will also contribute to fostering community involvement in conservation of these iconic species.”

“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. “It will draw in private sector investment into conservation and biodiversity, a pressing environmental concern globally, and we are hopeful that this structure can be replicated across various geographies and for the conservation of various species. We are delighted to have been a part of the collaborative effort to bring this innovative transaction to life.”

At Citi we are proud to have worked on this innovative and ground-breaking Wildlife Conservation Bond, which will meaningfully contribute to the conservation of black rhino populations in South Africa,” said, Nacho Gutierrez-Orrantia, Head of EMEA Banking, Capital Markets & Advisory at Citi. “This transaction enables fixed income investors to engage with the World Bank and Global Environment Facility in support of an important biodiversity impact project. This bond can be an important template for future capital markets engagement in support of biodiversity.”

“The WCB is an important milestone in the drive to transform how conservation is funded. Impact financing mechanisms that rely on robust and verified impact measurement have significant potential to catalyse additional finance for conservation. Scaling products such as the WCB into additional conservation landscapes can begin to meet the growing financial gap in conservation while driving efficiency and accountability. Conservation Alpha is honoured to be part of making this happen,” said Chris Barichievy, Technical Director, Conservation Alpha.

“The launch of the WCB – the world’s first financial instrument dedicated to protecting a species — is a watershed moment for wildlife conservationZSL has spent more than five years working with many outstanding organisations to lay the groundwork for this innovative new financing mechanism that will bring a much-needed injection of new and long-lasting capital into rhino conservation efforts in Africa and help put nature at the heart of financial decision making,” said Dr. Andrew Terry, Director of Conservation and Policy, Zoological Society of London.

Issuer International Bank for Reconstruction and Development (“IBRD”)
Size (Aggregate Nominal Amount)  USD 150,000,000
Trade Date March 23, 2022
Settlement Date March 31, 2022
Maturity Date March 31, 2027
Issue Price: 94.84 per cent of the Aggregate Nominal Amount
Park Managers: South African National Parks and Eastern Cape Parks and Tourism Agency
Conservation Investment Payment The Issuer will make payments through the Global Agent to the Park Managers in instalments to fund rhino conservation in the form of Conservation Investment Payments totaling ZAR 152 million. These Conservation Investment Payments will be utilized by the Park Managers to implement conservation and adaptive management activities that seek to maximize net rhino growth rates over five years.
Redemption Amount Redemption at Par
Conservation Success Payment The Issuer will pay a Conservation Success Payment to Noteholders at maturity, which will be determined based on the rhino population growth rate in AENP and GFRNR over the term of the bonds. The maximum Conservation Success Payment is US$13.76 million:

Final Rhino Population Growth Rate (X) Conservation Success Payment
(USD per Calculation Amount of $1,000)
X ≤ 0% 0
0% < X ≤ 2% 36.69
2% < X ≤ 4% 73.38
X > 4% 91.73
Sole Structurer Credit Suisse
Joint Bookrunners Credit Suisse and Citibank, NA
Calculation Agent Conservation Alpha
Verification Agent Zoological Society of London
ISIN US45906M3A71
CUSIP 45906M3A7
Listing Luxembourg Stock Exchange

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