New conservation funding model to accelerate reforestation efforts in the Amazon

The $225 million Amazon Reforestation Linked Bond, issued by the World Bank, connects capital market investors with reforestation projects in the Amazon. This bond is designed to encourage reforestation by linking investors’ financial performance to the issuance and monetization of Carbon Removal Units (CRUs). The initiative seeks to support the conservation and restoration of Amazonian forests, and also aims to boost socioeconomic development in local communities and increase biodiversity, taking advantage of the growing global interest in carbon removals as a valuable asset in carbon markets. In addition, the bond is structured so that a portion of the payments that investors would normally receive is used to directly finance reforestation projects, channeled through HSBC to Mombak, a Brazilian company specializing in large-scale reforestation projects in the Amazon.