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Sustainable development

IFC Announces Anchor Investments in Sustainability Bonds to Drive Green and Social Goals in Tanzania

Strategic Insights

— 2 min read

In a significant move to widen access to finance for projects driving green, social, and sustainability goals in Tanzania, the International Finance Corporation (IFC) has announced anchor investments in sustainability bonds issued by NMB Bank. The proceeds from the bonds will finance or refinance projects aimed at protecting the environment, reducing greenhouse gas emissions, and contributing to socially responsible initiatives. IFC has subscribed to almost 16 percent of the Tanzanian shilling and U.S. dollar-denominated tranches of the multicurrency bond, equivalent to $25 million in Tanzanian shillings.

Key Takeaways:

  • IFC has invested in sustainability bonds issued by NMB Bank, aiming to drive green, social, and sustainability goals in Tanzania.
  • The bonds will finance or refinance projects in renewable energy, energy efficiency, sustainable water and wastewater, green buildings, clean transport, and affordable housing.
  • IFC's investment in the bonds is equivalent to $25 million in Tanzanian shillings, accounting for almost 16 percent of the total bond issue.
  • The bonds align with the 2021 Social Bond Principles of the International Capital Markets Association, ensuring transparent and accurate reporting to stakeholders.
  • By 2027, NMB Bank expects to increase its number of loans extended to MSMEs by almost 50 percent, thanks to the proceeds from the bonds.
  • IFC anticipates the creation of at least 3,200 new jobs over four years through projects and businesses funded or co-funded by the bonds.
  • The investment follows IFC's previous investment in NMB's Jasiri gender bond, which financed over 3,000 women-owned MSMEs in Tanzania and helped bridge access to finance gender gaps.
  • IFC co-anchored the Tanzanian shilling portion of the investment with British International Investment, and the investment is supported by the International Development Association's (IDA) Private Sector Window Local Currency Facility.

Statistics:

  • IFC invested $25 million in Tanzanian shillings in the sustainability bonds.
  • The bonds raised $159 million in total, with almost 16 percent coming from IFC's investment.
  • By 2027, NMB Bank expects to increase its number of loans extended to MSMEs by almost 50 percent.
  • IFC anticipates the creation of at least 3,200 new jobs over four years through projects and businesses funded or co-funded by the bonds.
  • The bond issue was split into two tranches, with one issued on November 12, 2023, and the other on December 8, 2023.

Sources:

  • Euclid Infotech Pvt. Ltd. (2023). "IFC Announces Anchor Investments in Sustainability Bonds to Drive Green and Social Goals in Tanzania". Contify.com.
  • International Capital Markets Association (2021). "Social Bond Principles".
  • International Finance Corporation (2023). "IFC Supports NMB Bank's Sustainability Bond Issuance in Tanzania".

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