The World Bank in January issued a NOK 5 billion sustainable development bond to raise awareness for its strategy, projects and programs that focus on gender equality and health, highlighting the pandemic’s disproportionate impact on women and girls. The deal broke records as the largest NOK-denominated bond issue from a supranational bank, drawing strong investor interest from banks, bank treasuries and corporates. Nordea was the lead manager for the transaction.
“Amidst the vast challenges that Covid-19 continues to present to the world, we applaud the efforts of the World Bank to support those most vulnerable to the effects of the pandemic. Nordea is proud to support the World Bank in raising awareness for this issue,” says Philip Asp, Head of Investment Banking at Nordea.
The landmark NOK issue was named a market leading “TopDeal” by CMDportal, a recognition for financing that pushes the boundaries of debt capital markets by being new or highly successful.
The record-breaking deal highlights the pioneering role of the World Bank in responding to a growing investor interest that has expanded from green bonds to supporting sustainability and the UN Sustainable Development Goals (SDGs) overall. In recent years, the World Bank has issued a number of landmark trades, in particular in Nordic currencies, raising awareness for issues such as food waste, water and ocean resources and now gender equality and healthcare.
Confronting Covid-19’s impact on women and girls
The latest NOK 5 billion issue draws attention to the pandemic’s impact on health (SDG 3) and gender equality (SDG 5). The World Bank is working to support countries to both address the health emergency and use the recovery effort to rebuild economies that are more inclusive and resilient to future shocks and ensure that projects responding to Covid-19 consider the pandemic’s different impacts on men and women. These include:
- Women slipping through social safety nets because they are overrepresented in the informal sector;
- Increased domestic care burdens on women;
- Health vulnerabilities, with a larger share of women in the health sector, and as home and family caregivers, and therefore more exposed to contagion;
- An elevated risk of mental health stress on frontline workers, who are often women;
- Shifting resources to deal with the public health emergency can disrupt key health services for women and girls, such as reproductive health services;
- Social and gender norms will play a role in educational investment decisions, which could result in resources for home schooling or at the community level being redirected to boys over girls;
- Data from call centers and from surveys in countries across the world indicate a sharp spike in gender-based violence following lockdowns and economic stresses;
- Other pre-existing risks may also worsen, including adolescent pregnancy and unequal access to health care and essential services.
For more information, see this World Bank policy note on “Gender dimensions of the COVID-19 pandemic” and listen to the related podcast, “How COVID-19 is uniquely threatening women and girls.”
The World Bank is supporting Covid-19 response programs all over the world, including health system strengthening as well as education and distance learning projects that are designed to ensure special care is given to gender equality.
We look forward to hearing from investors about their specific areas of interest, so that we can build on that for our next issuance.
A pioneer for sustainability with close Nordic ties
The World Bank has had a special link to the Nordics when it comes to ESG, ever since it issued the world’s first green bond in collaboration with four Swedish pension funds in 2008. Since then, the bank has issued green bonds in many different markets, totalling about USD 15 billion, and the market has grown significantly. Given that all World Bank projects are assessed for environmental and social risks and are designed intentionally for positive impact and green bonds shed light on only a small portion of its development activities, the World Bank decided to broaden the concept to all the bonds it issues, according to Heike Reichelt, Head of Investor Relations and Sustainable Finance at the World Bank Treasury.
“We heard from investors that they were increasingly using their investments to highlight a range of social issues, and many were using the SDGs as a framework to report to their stakeholders. So, because we raise funds in the market for a broad range of activities that all support sustainable development and help our member countries tackle the SDGs, we decided to shed light on our entire portfolio and engage with investors around specific SDGs,” says Reichelt.
The World Bank has been a pioneer, enabling investors to move beyond solely investing in green bonds as a way to have a positive ESG impact to supporting sustainability and the SDGs overall. The bank has met with investors across the Nordics, issuing a number of landmark trades in Nordic currencies, raising awareness for a range of different SDGs.
In October, for example, the World Bank issued a dual-tranche NOK/SEK sustainable development bond highlighting food loss and waste in commemoration of World Food Day.
The topics are selected based on feedback from investors and colleagues in operations who help identify themes of specific relevance, based on international initiatives, explains Reichelt.
“We learn a lot from our World Bank colleagues who are experts in various fields, such as how to tackle food loss and waste,” she adds.
An expanded Nordic product offering
On the back of a strong response from investors in Nordic currencies, the World Bank has expanded its Nordic product offering in recent years. In November 2019, it issued its first DKK bond after more than two decades – a 20-year DKK 3 billion green bond that was well-received by Danish and Swedish pension funds. It also started issuing floating-rate notes in NOK in 2019.
The bank has been actively reaching out to investors, so they are more aware of its triple-A credit, its products as well as its development mandate and how it works with member countries to help them achieve their goals. It aims to continue to be active in Nordic markets and engage with investors on the SDGs and development themes relevant to them, says Reichelt.
“Hopefully the markets will continue to present those opportunities. We look forward to hearing from investors about their specific areas of interest, so that we can build on that for our next issuance,” she adds.