Reproduced from World Bank press release, Washington, 20 December
The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today issued a Georgian lari 31 million 2-year Sustainable Development Bond while engaging with investors on the importance of road safety. The Record Emerging Market Sustainable Finance Fund is the sole investor in this transaction. Bank of America arranged the transaction.
The World Bank raises funds by issuing Sustainable Development Bonds in the international capital markets to support the financing of sustainable development projects in developing countries across a range of sectors, including among others: agriculture and food security, education, energy, finance, healthcare and social services, environment and gender equality.
The World Bank supports programs and activities in its member countries designed to achieve a positive social and environmental impact in line with the World Bank’s “twin goals” of eliminating extreme poverty and promoting shared prosperity. These “twin goals” are aligned with the Sustainable Development Goals (SDGs).
Jingdong Hua, Vice President and Treasurer, World Bank, said, “We are thankful to investors for their continued support of World Bank Sustainable Development Bonds and interest in supporting our work in developing countries on a variety of important development themes, such as road safety. We are pleased to issue IBRD bonds in a variety of currencies, helping to diversify our investor base while contributing to the development of countries’ local currency markets.”
With this investment, the World Bank is raising awareness for the importance of road safety and how it is working with member countries to introduce transportation policies and systems that increase safety and reduce road fatalities. Improving the safety of transportation systems directly contributes to SDG 3 (Good Health and Well-Being) and SDG 11 (Sustainable Cities and Communities). Investments that incorporate road safety also contribute to many other SDGs by saving lives, preserving human capital, and promoting economic development.
Riccardo Puliti, Vice President for Infrastructure, World Bank, said, “Ninety percent of road fatalities occur in low- and middle-income countries, making this a very important issue for the World Bank and our borrowing member countries. We are pleased that this Sustainable Development Bond raises awareness on this topic.”
Road safety is an important development challenge because road crashes rank as the leading cause of death globally for children and youth aged 5-29. The World Bank is implementing a Safe System approach to support road safety in its member countries. It includes strengthening countries’ capacity to design and implement effective road safety interventions and create a holistic, country-level road safety management system.
Dr. Dmitri Tikhonov, CIO, Record, said, “Given Record Emerging Market Sustainable Finance Fund’s commitment to responsible investment and development of local currency markets, we are pleased to support World Bank Sustainable Development Bonds denominated in Georgian lari, while highlighting the importance of road safety and connecting our investments to the SDGs.”
iRAP congratulates World Bank for this pioneering initiative in the history of road safety. Evidence-based financing of 3-star or better road infrastructure in developing countries has the potential to save thousands of lives and serious injuries in the Second Decade of Action for Road Safety.
For more information on the Business Case for Safer Roads, visit https://www.vaccinesforroads.org/business-case-for-safer-roads/
World Bank (IBRD) Project Examples*
Karachi Mobility Project
Some corridors in Karachi experience one fatality per kilometer per year, one of the highest rates in the world for urban corridors. Karachi also lacks a formal mass transit system. The Karachi Mobility Project is designed to rehabilitate road infrastructure and construct a Bus Rapid Transit system along the 21-kilometer Yellow Corridor. Expected results include lowering the annual number of traffic fatalities by 50%, saving 15,000 lives, and reducing serious injuries. These human capital gains are equivalent to an economic saving of $142 million over 20 years. In addition, the project is expected to reduce carbon dioxide emissions by 28,000 tons per year through increased use of low-carbon transport.
East West Highway Corridor Improvement
While 76% of international roads in Georgia are in good or fair condition, most of the secondary roads (45%) and local roads (85%) have deteriorated and lack maintenance funding. Reducing road fatalities requires, amongst other factors, a coordinated road safety strategy and action plan. The project supports the development of key sections of the East West Highway corridor, as well as supporting the development of information technology systems for the roads department to improve traffic control. The system can be used to support analysis of the causes of road accidents. Expected project results include various outputs including the endorsement of an annual road safety action plan, improving the safety of roads, and reducing carbon dioxide emissions by over 20% by shortening travel distance and reducing congestion. In addition, the project, together with earlier phases of the corridor development, supports the development of institutional capacities, including road safety functions.
*These examples of projects are for illustrative purposes only and no assurance can be provided that disbursements for projects with these specific characteristics will be made by the World Bank during the term of the bonds described herein.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization. Created in 1944, it is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals (SDGs) and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing bonds in the international capital markets for over 70 years to fund programs and activities to achieve a positive impact. More information on World Bank bonds is available at www.worldbank.org/debtsecurities.
World Bank bonds support the financing of programs that further the Sustainable Development Goals (SDGs). World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e., “sustainable development” projects, programs and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework. The World Bank is also a member of the Executive Committee of the Green Bond, Social Bond, and Sustainability Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development. The World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.
Net proceeds of the bonds described herein are not committed or earmarked for lending to, or financing of, any particular projects or programs, and returns on the bonds described herein are not linked to the performance of any particular project or program.
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development (“IBRD”), also known in the capital markets as “World Bank”. Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws.
Head of Investor Relations and Sustainable Finance
World Bank Treasury