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New European Investment Bank Green Bond to initially focus on water sector

The European Investment Bank (EIB) has announced plans for a new debt product: a Sustainability Awareness Bond, which will initially focus on the water sector.

Activities in the water sector were selected at first as the EIB has considerable experience and available reporting indicators allowing the bank to evaluate its financing impact on reaching several SDGs linked to this sector.

The new bond will build on the success of the Green Bond pioneered 11 years ago by the EIB, highlighting the Bank’s key role in sustainable finance both in and outside of Europe.

The United Nations has welcomed the new financial product as a major step in the international development effort.

The aim of the bond is to support the achievement of the United Nations Sustainable Development Goals by further unlocking investment in social, green and sustainable projects.

Speaking ahead of a debate co-hosted by the EIB and the Washington DC based Brookings Institution at the IMF/World Bank Group Spring Meetings on “A new EIB bond product in support of the Global Goals: Building a sustainable financial system”, EIB President Werner Hoyer said:

“Through the development of the Green Bond market which we pioneered 11 years ago, we have seen the hugely positive impact of engagement by the financial markets. Green Bonds have created a new way to connect investors with green assets and put the issue of green investment at the heart of the climate change agenda globally.

Capital market engagement has definitely helped boost the prominence of environmental matters in the policy arena. Now, as the bank of the European Union, we can build on this success. We want to go further still to support the international development effort and specifically the UN’s Sustainable Development Goals.”

The Administrator of the United Nations Development Programme (UNDP), Achim Steiner, welcomed the announcement. Speaking alongside Dr Hoyer at the event he said:

“The scale of the challenge we face in delivering on the Sustainable Development Goals is immense, and the contribution that financial markets can make in achieving the global goals is considerable. That’s why UNDP welcomes today’s initiative by the European Investment Bank for a new sustainable development bond to specifically support the Global Goals and sustainable investment in social projects that will help achieve these goals.“

The bank launched the world’s first green bond in 2007, and remains one of the most active green bond issuers.

The new Sustainability Awareness Bond is currently being prepared by the Finance and Projects Directorates of the European Investment Bank.

The first issuance of the new Sustainability Awareness Bond is expected to take place this autumn. While the EIB’s Green Bonds (or Climate Awareness Bonds, CABs) focus on climate action-related investment, the new product will have a wider scope.

The United Nations has estimated that around 6 trillion USD will be needed annually over 15 years to achieve the Sustainable Development Goals.

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