The World Bank International Bank for Reconstruction and Development today boosted 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 US$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).  

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.” 

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 book runner with Citibank.   

“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  

Rhino protection helps other species that share their habitat. This ecosystem contributes to South Africa’s national economy through tourism and job creation, and as an important source of foreign exchange. However, Black rhinos were critically endangered, mainly due to poaching and habitat loss, explained the Minister of Forestry, Fisheries and the Environment, Barbara Creecy.  

“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,” she said.  

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.