World's first wildlife bond conservation is being issued - Rhino Bond!
The bond has tenor of 5 years and returns for the bond investors will depend on the rate of growth in populations of the Black Rhino in two South African reserves - the Addo Elephant National Park and the Great Fish River Nature Reserve.
Black rhino numbers have dropped to ~2,600. Note that this was over 65,000 in 1970, and may once have been as high as 850,000 roaming the earth.
The amount raised via this bond will be used towards conserving the animals (medicine, food, protection, etc.) and the holders of the bond will receive a payment from the Global Environment Facility based on the targets for population growth.
E.g. If the population goes through decline, no payment will be made. If the population grows between 0-2%, some amount will be paid, from 2-4% higher amounts will be paid and the highest payment will be for a growth rate of more than 4%.
If this works, this can be replicated to help protect rhinos in Kenyaβs reserves as well as other population species like lions, tigers, gorillas, etc.
Impact investing has been used for a variety of causes like girl education in rural India, homelessness in the UK, Asthma treatment in the US, etc.
Such bonds can help create social impact by harnessing the power of finance. It is a way for private players to invest in public/social goods (e.g. environment, biodiversity, etc.). Hoping to see more such innovations in the world of finance.
Link to the bond issue details : worldbank.org
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