The World Bank will begin selling the world’s first conservation bond aimed at raising money to protect and grow South Africa’s endangered rhino population.
The wildlife bond will be a five-year, 670 million rand ($45 million) security expected to be sold later this year. The return on investment for those who purchase will be determined by the growth rate of the endangered animals in two South African reserves.
If the project gains traction and is successful, it could expand to other species such as Kenya’s black rhino as well as gorillas, tigers, lions, and more. The wildlife bond bridges the gap for those who want to invest and gain a profit while also making a philanthropic impact.
“When working on innovative structures like this one, we start small and hope to learn from the first one and then get successfully larger in an ambition to ultimately scale what works,” Marisa Drew, the chief sustainability officer at Credit Suisse Group AG, which is advising on the project, told Bloomberg.
The terms of the rhino bond outline that investors will forego the traditional annual coupon and instead receive their original investment and payout based on how much the rhino population grew over the course of five years. The principal and payout will both be paid by the Global Environment Facility — an organization that has garnered donations from more than 40 countries to date.
South Africa is home to the majority of the world’s rhino population. About 80 percent of the 29,000 remaining rhinos live in the country, most of which are white rhinos. Black rhino numbers have steadily declined from 65,000 40 years ago to around 5,500 today.