The London Stock Exchange (LSE) has listed a new bond from the IFC (a part of the World Bank Group) giving investors the option of being repaid in either carbon credits or cash.

The five year Forests Bond has now raised over $150m from international investors, to support private sector development and prevent deforestation in developing countries. To pay investors a carbon credit coupon, IFC will buy carbon credits from a project that follows the UN Reducing Emissions from Deforestation and Forest Degradation (REDD) scheme in the Kasigau Corridor project in Kenya.

IFC developed the Forests Bond with BHP Billiton and Conservation International, the global non-profit environmental organisation, and it represents the first of its type. The LSE is promoting the listing as it attempts to develop London as the leading international hub for green finance, helped also with its recent launch of a dedicated Global Sustainable Investment Centre.

The London Stock Exchange has a number of global first green bond issuances, from India’s Axis Bank, China’s Agricultural Bank of China, Japan’s Development Bank of Japan and the IFC. It currently has 39 green bonds issued by international institutions, municipalities and corporates listed in 7 currencies, having raised $10 billion, and in 2016 13 new green bonds in 5 different currencies have raised approximately $4.59 billion.

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