The International Bank for Reconstruction and Development (IBRD) issued a ground-breaking $150 million sustainability 'rhino bond' to support rhino conservation in South Africa in March 2022.

Unusually, the five-year wildlife conservation bond does not pay a coupon to investors. Instead, the IBRD – which is part of the World Bank – will pay ZAR152 million ($10 million) to two protected areas in South Africa.

If rhino conservation efforts are successful, then investors will receive a 'conservation success payment' at maturity of the bond. If the rhino population grows 4% or more then investors could receive the maximum success payment of $13.8 million for the bond. However, if the population fails to grow, then investors will receive no extra returns.The innovative structure garnered "keen interest" from capital market investors, donors, and institutions globally, the IBRD said.

The bond has sparked "many dialogues on replicating and scaling up the structure to fund other biodiversity and development challenges globally, such as climate change, gender, and food security", it continued.

One judge agreed, saying the transaction "provided a blueprint for future issuance in an area that is in need of significantly more financing".

Another judge said: "It can be difficult to structure a bond wholly focused on biodiversity, which is notoriously hard to incorporate as a majority focus into sustainable finance instruments. This structure needs recognition for the thought and effort it took to construct."

Credit Suisse said the bond has the potential to "shift the conservation funding model, harnessing donor funds in a blended finance approach that mobilises private sector funding through traditional debt capital markets".

The bond marked an increase in innovative impact-focused issuances, the bank said. It also worked on a blue bond programme that fostered innovative debt refinancing in Belize in 2021, and a $150 million debt conversion initiative with Barbados targeting protecting biodiversity.