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What are Green Bond eligible projects?

Examples of eligible projects supported by the World Bank Green Bonds

The below examples of projects are for illustrative purposes only and no assurance can be provided that disbursements for projects with these specific characteristics will be made by the World Bank during the lifetime of the Bond2.

Morocco:
Renewable Energy Program

  • Objective: Replace fossil fuel-based electricity with renewable energy through a concentrated solar power project adding 410 MW representing 21% of Morocco’s solar development commitment by 2020.
  • Target outcomes: Reduce CO2 emissions by 522,000 tons per year – equivalent to taking over 110,000 passenger vehicles off the road each year3.

Indonesia:
Water resources and irrigation management program

  • Objective: Improve climate resilience of water resources and food production through improved water basin resource and irrigation management and increased irrigated agriculture productivity.
  • Target outcomes: 500,000 farmer households benefit from increased crop productivity because of more efficient and reliable irrigation.

China:
Energy Efficiency Program

  • Objective: Promote energy conservation in industry through supporting intermediary loans for energy efficiency projects in manufacturing companies.
  • Target outcomes: Reduce CO2 emissions by 12.6 million tons annually – equivalent to taking 2.7 million passenger vehicles off the road each year3.

Mexico:
Forestry Management Program

  • Objective: Reduce deforestation and forest degradation through a forest improvement management program.
  • Target outcomes: Add 1.6 million hectares of forest, sustainably managed, benefitting 4,000 forest communities.

Columbia:
Urban transit program

  • Objective: Reduce carbon emissions and improve public transportation efficiency and safety.
  • Target outcomes: Reduce accidents, travel time, and pollution (including greenhouse gases) associated with bus transport services.

Type of eligible projects

Like all World Bank projects, green projects are designed to reduce poverty and improve local economies. Green bond eligible projects are a subset that focuses on climate change issues that directly impact developing countries and address the global climate challenge.

 

The Project Selection Criteria are applied to screen projects resulting in a list of eligible mitigation and adaptation projects

 

  • Mitigation of climate change projects : Solar and wind installations, funding for new technologies that permit significant reductions in greenhouse gas emissions, rehabilitation of power plants and transmission facilities to reduce greenhouse gas emissions, greater efficiency in transportation, including fuel switching and mass transport, waste management and construction of energy-efficient buildings, carbon reduction through reforestation and avoided deforestation.
  • Adaptation to climate change projects : Protection against flooding, food security improvement and implementing stress-resilient agricultural systems (which slow down deforestation), sustainable forest management and avoided deforestation.

Selection process of eligible projects

All projects supported by the World Bank undergo a rigorous review and approval process to ensure that the projects meet client countries’ development priorities.
The process includes early screening to identify potential environmental or social impacts and designing policies and concrete actions to mitigate any such impacts:

 

  • Every World Bank project is approved by its Board of Executive Directors – a resident Board with 25 chairs representing its member countries.
  • Environmental specialists then screen approved World Bank projects to identify those that also meet the Green Bond eligibility criteria.

Proportion of the Green Bonds proceeds allocated to these projects

100% of the proceeds are allocated to Green Bond eligible projects:

 

  • Proceeds are credited to a separate Green Cash Account and are invested in accordance with the World Bank’s conservative liquidity policy until used to support the financing of eligible projects.
  • Disbursements are typically made over a period of several years, depending on when each project milestone is reached.
  • As disbursements are made for Green Bond eligible projects, corresponding amounts from the Green Cash Account are allocated to the general lending pool periodically and at least on a quarterly basis.

Evaluation methodology of the projects’ impact

The World Bank supervises the implementation of all projects:

 

  • Regular reports by the implementing government agency on project activities.
  • Mid-term review of project progress.
  • Outcomes and impacts are monitored by the government agency and the World Bank throughout the implementation phase, data is collected to measure the ultimate effectiveness of the project in terms of the objectives it was set to achieve.
  • The World Bank’s Independent Evaluation Group (IEG) assesses the performance of about one out of four projects, measuring outcomes against original objectives, sustainability of results and institutional development impact.

Energy

Pollution reduction

CO2 emissions

Water

Living conditions improvement

Culture improvement

Monitoring the impact of my investment

Green Bond eligible projects are listed on the World Bank Green Bond website4, including summaries about the projects and key impact indicators.

 

These summaries also link to the detailed project information that is available on the World Bank website5.

1
Under the conditions specified in the Final Terms.
2
For a detailed description of the use of proceeds and eligible projects, please refer to the Final Terms.
3
Calculated using the Environmental Protection Agency (EPA) Greenhouse Gas Equivalency Calculator at http://www.epa.gov/cleanenergy/energy-resources/calculator.html
4
5
For more information on the projects supported by World Bank Green Bonds, please visit the website http://treasury.worldbank.org/cmd/htm/MoreGreenProjects.html
and see the World Bank Green Bond impact report: http://treasury.worldbank.org/cmd/pdf/