Fiji’s Green Bond

In October 2017, Fiji became the first emerging market to issue a sovereign green bond, raising 100 million Fijian dollars, or US$50 million, to support climate change mitigation and adaption.

Home to over 870,000 people, Fiji’s 300 volcanic islands include low-lying atolls that are highly susceptible to cyclones and floods. In 2016, Tropical Cyclone Winston—the most intense tropical cyclone in the Southern Hemisphere on record—passed directly over Fiji, causing economic losses that amounted to almost one third of the country’s GDP. Like all Pacific island states, Fiji is also highly vulnerable to the impact of climate change: close to 20 percent of the region’s 10 million people could be displaced due to climate change by 2050.

Green bonds are fixed income, liquid financial instruments that are used to raise funds dedicated to climate-mitigation, adaptation, and other environment-friendly projects. This provides investors an attractive investment proposition as well as an opportunity to support environmentally sound projects.


London Stock Exchange Market Opening

Fijian Prime Minister Frank Bainimarama with British MP Claire Perry at opening of London Stock Exchange on 18 April 2018.

Speech by the Prime Minister and COP23 President at the opening of the London Stock Exchange on 18 April 2018. 

This is an important day for Fiji as we celebrate the listing of our Sovereign Green Bond on this great Exchange – arguably the premier capital market in the world. And it has been a great thrill for me to be here in person to open the day’s trading.

Fiji – a small island state in the Pacific -has brought a novel financial instrument to this famous floor. It’s an instrument designed to help our nation cope with the reality of climate change – to finance the various projects we need to build a more climate-resilient economy. And we have shown the world that an emerging market bond with these characteristics can be launched successfully.

Information and News

Fiji’s Green Bond Opens Market at London Stock Exchange

London Stock Exchange Group today welcomed Fiji’s first international green bond to start trading on the green bond segment of its International Securities Market (ISM). Fiji’s landmark transaction represents the first international sovereign green offering from an emerging economy and from a Commonwealth country.

Fiji’s Green Bond Launch Sees Unprecedented Support

Two weeks after the launch of Fiji’s Green Bond, the Fijian Government has announced the issuance of the first bonds on 1 November after receiving overwhelming interest both among domestic and international investors.

Fiji Launches First Emerging Market Green Bond and Third in World

Fiji has become the first emerging market to issue a sovereign green bond, raising 100 million Fijian dollars, or US$50 million, to support climate change mitigation and adaption.

 

Fiji’s First International Green Bond

Guidance for Sovereign Green Bond Issuers

A sovereign green bond presents countries with an opportunity to demonstrate national leadership in the green financing agenda while giving exposure to a new investor base and solidifying a country’s commitment to complying with the Paris Climate Change Agreement.

While green bonds allow sovereign issuers to appeal to a new class of investors—domestically or internationally— in addition to the usual costs associated with the preparation of a vanilla government bond, green bonds require upfront and ongoing resources that are not recoverable through bond proceeds. Many potential investors need to be educated on the benefits of a green bond—for themselves and the country as a whole. Studies have shown an increasing number of millennials are attracted to investments that will have a positive environmental impact, making it a wise choice for retail issuances and institutions whose customer base will increasingly include millennials.

This publication Guidance for Sovereign Green Bond Issuers With Lessons from Fiji’s First Emerging Economy Sovereign Green Bond was produced by the joint IFC-World Bank Finance, Competitiveness & Innovation Global Practice (FCI) to provide governments with valuable information about issuing sovereign green bonds in emerging markets.

Green Bond Fact Sheet

  • Fiji announced a 100m Fiji dollar (50m US dollar) sovereign green bond in October 2017, during the pre-COP in Nadi, Fiji, with technical support from World Bank Group wide team.
  • This was the first sovereign green bond issued by an emerging economy, first from a small island state, and the first sovereign green bond in the Pacific.
  • It was the third sovereign green bond to be issued in the world, after France and Poland.
  • This issuance demonstrated to other emerging economies the potential for sovereign green bond issuances to support financing of their climate commitments.
  • The green bond will fund projects targeted towards climate mitigation and adaptation to build a stronger, more resilient Fiji.
  • Fiji is exposed to large natural risks, especially from floods and tropical cyclones, as well as large and uncertain long-term threats from climate change, especially from sea level rise and increased intensity of extreme weather events.
  • The Fiji green bond will finance Fiji’s transition to a low carbon economy in line with its commitments under the Paris Agreement, and demonstrate the small island nation’s commitment to the global community to combatting climate change.