The European Investment Bank launched Sustainability Awareness Bonds, a financial instrument focused on “big-impact projects,” beginning with water- and sanitation-related projects.
The bonds aim to provide added incentive to look for projects that have significant sustainability impacts.
The offering complements EIB’s existing Climate Awareness Bonds and builds on past successes with green bonds.
6 September 2018: The European Investment Bank (EIB) has announced an instrument to finance achievement of the SDGs. The ‘Sustainability Awareness Bonds,’ launched with €500 million to start, will fund social and environmental projects around the world.
According to EIB, the bonds will focus on “big-impact projects” that achieve multiple SDGs simultaneously. Patricia Castellarnau, EIB, notes that the Bank’s mission already commits 25% of its financing to climate and the environment, while the new bonds will give added incentive to identify projects with significant sustainability impacts. The term “awareness bonds” is intended to stimulate demand and remind investors that they tackle humanity’s major environmental and social challenges.
Clear guidelines, accountability and transparency has been an important driver of EIB’s green bond growth.
This offering is aligned with and complements EIB’s Climate Awareness Bonds. It also builds on its past successes with green bonds, around which EIB has raised more than €23 billion since their inception 11 years ago. The press release notes that EIB’s reputation for clear guidelines, accountability and transparency has been an important driver of green bond growth in the past, and the same methods and reporting requirements will be applied to the Sustainability Awareness Bonds.
EIB’s Eila Kreivi notes that the projects supported by the bonds can have a direct impact on people’s lives. While funds raised from the bonds will be used initially for drinking water, sanitation and flood protection projects, “future bond issues will target more social sectors,” including health, education and gender.
The press release highlights that the EIB is currently the world’s largest water financier, having provided over €66 billion to over 1,400 water ventures. [EIB press release]