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Sustainable development

IFC Invests in Tanzanian Sustainability Bonds to Drive Green and Social Goals

Strategic Insights

— 1 min read

The International Finance Corporation has made a significant investment in the sustainability bonds issued by NMB Bank in Tanzania, aiming to widen access to finance for projects driving green, social, and sustainability goals. The bonds, launched on November 12 and December 8, raised a total of $159 million, with IFC subscribing to almost 16 percent of the Tanzanian shilling and U.S. Dollar-denominated tranches. The investment is expected to create at least 3,200 new jobs over four years and enable NMB Bank to increase its number of loans extended to MSMEs by almost 50 percent by 2027.

Key Takeaways:

  • IFC invested $25 million in Tanzanian shillings in the sustainability bonds issued by NMB Bank, equivalent to almost 16 percent of the total issuance.
  • The bonds will finance or refinance projects in Tanzania contributing to socially responsible initiatives, including renewable energy, energy efficiency, sustainable water, green buildings, clean transport, and affordable housing.
  • NMB Bank aims to increase its number of loans extended to MSMEs by almost 50 percent by 2027, with support from the sustainability bonds.
  • IFC anticipates that the bonds will create at least 3,200 new jobs over four years.
  • The sustainability bonds align with the 2021 Social Bond Principles of the International Capital Markets Association.
  • NMB Bank is supporting small businesses participating in qualifying green and social projects, enabling them to access finance and grow their businesses.
  • The investment follows IFC's previous investment in NMB Bank's Jasiri gender bond, which has financed over 3,000 women-owned MSMEs in Tanzania.

Statistics:

  • $159 million: Total amount raised from the sustainability bonds issued by NMB Bank.
  • 16%: Share of the Tanzanian shilling and U.S. Dollar-denominated tranches invested by IFC, equivalent to $25 million in Tanzanian shillings.
  • 2027: Target year for NMB Bank to increase its number of loans extended to MSMEs by almost 50 percent.
  • 3,200: Minimum number of jobs expected to be created by projects and businesses funded or co-funded by proceeds from the bonds.
  • 4 years: Duration over which the jobs are expected to be created.

Sources:

  • [International Finance Corporation press release, title:] IFC Invests in Tanzanian Sustainability Bonds to Drive Green and Social Goals.
  • [International Capital Markets Association, date:] 2021 Social Bond Principles.

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