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Response from IFC fails to answer any of REDD-Monitor’s questions about its “Forest Bond”

On 1 November 2016, I wrote about the International Finance Corporation’s launch of a US$152 million “forest bond”. I also sent some questions to the IFC about the bond issue:

IFC's Forest Bond

On 18 November 2016, having received no response from the IFC, I posted the questions on REDD-Monitor. I sent one set of questions to Alexandra Klopfer, Communications Lead, Office of the IFC Vice President and Treasurer. And I sent a second set of questions to Vikram Widge, Head of Climate and Carbon Finance at the IFC. Both sets of questions are available here:


Yesterday, I received a reply, from Alexandra Klopfer to the questions I sent to Vikram Widge.

I asked Widge to confirm that I had understood the bond correctly and asked him the following five questions:

  1. In which projects will IFC invest the US$152 million raised by the bond issue?
  2. Whose projects are they, and what will they do?
  3. How will IFC select these projects? Are there any special criteria associated with this being called a “Forest Bond”?
  4. Is there any way of following where this US$152 million ends up?
  5. If there was no link to REDD (i.e. if investors just received cash) would this bond issue be any different to IFC’s other bond issues?

Klopfer’s response fails to answer any of these questions. I’ve re-sent the questions to the IFC and asked Klopfer and/or Widge to answer the specific questions.

From Klopfer’s response it appears that from outside the IFC, there is no way of knowing anything about where or how the US$152 million raised by the bond issue will be invested.

So it’s not a “forest bond” in anything but name. It’s just a bog standard IFC bond issue with a bit of REDD green froth on top, thanks to an agreement from BHP Billiton, one of the world’s most polluting mining corporations, to pay up to US$12 million to Wildlife Works to bail out its Kasigau Corridor REDD project in Kenya – a project that a recent study found was failing to address inequity:


From: Alexandra Klopfer
Date: 28 November 2016
Subject: RE: IFC Forest Bond
To: Chris Lang
Cc: Vikram Widge

Dear Chris,

Apologies for the delay in responding.

To confirm, the IFC Forests bond raised $152 million. IFC will invest these proceeds in private sector development projects in emerging markets. You can find more information about IFC here.

For more information about our investments, you can also review our disclosure portal.

The IFC Forests bond differs from other IFC bonds in that it offers investors a choice between a carbon credit or cash coupon. The project from which IFC will purchase carbon credits to pay investors a carbon credit coupon is the Kasigau Corridor project in Kenya. Kenya is currently preparing its national strategy in line with the UN’s framework for REDD+. The Kasigau project is expected to be integrated into any future national jurisdictional program. In the meantime the project operates in the voluntary space and issues credits under the Verified Carbon Standard. In addition to VCS, it is also designed and audited under the Community, Climate & Biodiversity Standard to ensure integrity and equity.

BHP Billiton provides a price-support mechanism for the Forests Bond. If investors elect the cash coupon instead of the carbon coupon, BHP Billiton offtakes the carbon credits generated and delivered by the project.

Climate change mitigation is a strategic priority for IFC and halting deforestation is essential to meet the global community’s climate goals. The IFC Forests bond offers one way to support projects that protecting forests. Similar to the growth of the green bond market, we hope that our issuance will pave the way for other issuers and investors to follow.



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  1. Goodness, what drivel. These guys at the IFC really sound like the snake-oil salesmen from the carbon scamming companies. Citing VCS and CCBS ‘certification’ as if they’re actually worth the paper they’re printed on…

    “Climate change mitigation is a strategic priority for IFC” – yeah, sure it is: trying to squeeze some revenue out of carbon trading and derivatives thereof is one of the last lifelines left to the World Bank Group. But that’s a very different thing from saying it’s any good for either the climate or for investors.