Author: Brent Lindeque
New York, USA (24 March 2022) – The endangered black rhino in South Africa will receive extraordinary help from Wall Street with a new “Rhino Bond” that will only increase in value as the animal’s population increases! The pilot project has already been backed by the Washington-based lender which has issued a $150 million loan (over R2 […]
New York, USA (24 March 2022) – The endangered black rhino in South Africa will receive extraordinary help from Wall Street with a new “Rhino Bond” that will only increase in value as the animal’s population increases!
The pilot project has already been backed by the Washington-based lender which has issued a $150 million loan (over R2 billion) on the 31st of March.
Populations of black rhinos declined dramatically in the 20th century at the hands of hunters and poaching. Between 1960 and 1995, black rhino numbers dropped by a sobering 98%, to less than 2,500 left in the whole world. Since then, the species has made a tremendous comeback from the brink of extinction. Thanks to persistent conservation efforts across Africa, black rhino numbers have doubled from their historic low 20 years ago to around 5,600 today.
However, the black rhino is still considered critically endangered, and a lot of work remains to bring the numbers up to even a fraction of what it once was – and to ensure that it stays there. Wildlife crime – in this case, poaching and black-market trafficking of rhino horn – continues to plague the species and threaten its recovery.
But the new Wall Street bond wants to change that!
According to AFP, the bond profits will go directly to park staff to invest in fighting poachers and improving the animals’ conditions. The World Bank said the funds would benefit the Addo Elephant National Park and the Great Fish River Nature Reserve.
Officials hope the bond, two years in the making, will offer a new model to leverage private funds to finance conservation efforts or other projects. The catch is they must have benchmarks that can be objectively measured.
“The Rhino bond is a groundbreaking approach to enabling private sector investment in global public goods — in this case, biodiversity conservation, a key global development challenge,” World Bank President David Malpass said in a statement.
“The pay-for-success financial structure protects an endangered species and strengthens South Africa’s conservation efforts.”
The five-year bond, which priced Wednesday, will be sold at 94.84 percent of face value and will provide investors with a guaranteed minimum return once it matures. But they also can receive a share of $13.8 million from the Global Environment Facility if the number of rhinos increases. The return would be based on a sliding scale, and if growth reaches or exceeds four percent, investors receive the entire “success payment.”
“What we’re looking to do here is really change that risk allocation and say is there a way that we can pass some of that project performance… (and) risk to someone else other than governments and donors,” said Michael Bennet, head of market solutions and structured finance at the bank.
While boosting the rhino population is the primary goal of this bond, there are many positive benefits to the community, bank officials said.
“The nickname is the Rhino bond, but it’s about so much more than that. It also has real tangible benefits to the communities and incentives to protect land,” said Heike Reichelt, head of investor relations and sustainable finance at the World Bank Treasury.
The Rhino Bond – to Save South Africa’s Rhinos! Written by Brent Lindeque
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