December 14, 2021 – SINGAPORE – Impact Investment Exchange (IIX) has successfully priced the US$30 million Women’s Livelihood Bond™ for Climate (WLB4Climate), the fourth bond in the award-winning Women’s Livelihood Bond™ Series (WLB Series). Advancing a total of 14 United Nations Sustainable Development Goals (SDGs), the WLB4Climate will support an estimated 500,000 underserved women and girls in Asia to build resilient, sustainable, climate-friendly economies in the region.
The WLB4Climate is the second investment of IIX’s Women’s Catalyst Fund, a next-generation gender-lens instrument that has gained new partners, including a US$10 million investment from the US International Development Finance Corporation (DFC), a $1 million grant from the Korean International Cooperation Agency (KOICA), and a significant grant from the Australian Department of Foreign Affairs and Trade (DFAT).
The WLB4Climate brings together a global coalition of public and private sector partners committed to creating gender equality in climate finance, including the United States Agency for International Development (USAID) and the DFC, the global law firms Shearman & Sterling, Clifford Chance, Latham & Watkins, Paul Hastings, Harneys Westwood & Riegels; India-based law firm Cyril Amarchand Mangaldas; Singapore-based TSMP Law Corporation; New Zealand law firm Chapman Tripp; ANZ as the lead placement agent; Standard Chartered Bank and Barclays; securities service NetRoadShow; and World Resource Institute’s Partnering for Green Growth and the Global Goals 2030 (P4G).
IIX’s CEO and Founder, Professor Durreen Shahnaz, said, “The Global South cannot wait for rich nations to disburse financial aid to compensate for and mitigate the devastating damage caused by climate change. This is a death sentence to the very communities that fuel developing economies—especially women. When we first created the Women’s Livelihood Bond Series in 2017, we were creating a financial instrument that would change these systemic inequalities. With each new bond in the WLB Series, we’re building an entirely new asset class by and for the Global South that empowers developing countries with real results, rather than pledges and dialogues.”
The WLB4Climate is part of the US$150 million WLB Series, a series of innovative debt securities that creates sustainable livelihoods for over 3 million women across developing countries. The WLB4Climate is supporting women-focused enterprises in India, Indonesia, Cambodia, and the Philippines that are directly enabling women to create livelihoods that sustain themselves, their communities, and the planet, creating an ecosystem of climate-friendly small and medium sized enterprises (SMEs). The effects of climate change are most acutely felt by women in the developing world, who are trapped in subsistence living due to high structural barriers to gaining self-sufficiency. With over 60% of all working women in South and Southeast Asia employed in agriculture, bringing together climate action and women’s livelihoods is particularly important in Asia where the majority of the labor force participates in sectors impacted by climate change like agriculture, forestry, and fisheries. With innovative financing to support transitioning women and girls to affordable, clean energy, the WLB4Climate will enable them to be a part of the solution to achieving a net zero economy.
The WLB4Climate follows on the heels of the recent maturity of the Women’s Livelihood Bond™ 1 (WLB1), the world’s first gender lens and impact investing instrument to be listed on a stock exchange (the Singapore Exchange), which provided investors with an annual return of 5.65% from 2017-2021 while meeting or exceeding its social impact targets. The WLB™ Series demonstrates how innovative gender lens products can be accelerated even during a global downturn by addressing key elements of risk, return, and impact for investors.
Algene Sajery, Vice President of External Affairs and Head of Global Gender Equity Initiatives at DFC said, “IIX continues to bring the public and private sectors together by building the ecosystem for leveraging catalytic capital with the Women’s Livelihood Bond Series, demonstrating that collaboration is the way forward for inclusive growth and women’s empowerment. We are proud to use public sector funds to leverage nearly 10x in private capital. In addition, DFC’s loan to the Women’s Catalyst Fund is in alignment with its commitment to mobilize at least US$12 billion by 2025 to 2X-qualified transactions, supporting an estimated 15 million women and girls globally. We are especially excited about this investment because it provides capital to women who are designing solutions at the nexus of climate, food security and livelihoods.”
Paul White, Head of Capital Markets at ANZ, said, “The WLB4Climate bond has expanded its reach and impact by linking a diverse group of borrowers in Asia and expanding into new sectors. The broad spectrum of investor demand underpins the growing momentum among investors looking for a positive impact investment while earning an attractive return on their capital. ANZ is proud to have worked with IIX on the WLB4Climate bond that improves the livelihoods of up to half a million women and girls in Asia, as well as the environment with the first sustainability bond from the WLB series.”
“Affordable and trustworthy financing for women’s livelihoods is an imperative need in this time when resilience depends heavily on the economic recovery of the region. Investing in women entrepreneurs plays a critical role to meet the financing gap on which countries depend. Women not only give back to their own families; they enable the lifting up of their communities and contribute positively to climate action. Partnerships between the public and private sectors are integral to realizing this effort and we are proud to partner with IIX, US DFC, and the many supporters of this initiative,” said Ian de Cruz, Global Director of P4G – Partnership for Green Growth and the
Global Goals 2030.
The WLB4Climate represents the second investment from IIX’s Women’s Catalyst Fund (WCF), a gender lens investment vehicle designed to accelerate funding for underserved women in developing countries. The innovative finance fund has gone from strength to strength building on an initial grant funding from the Australian DFAT that has helped cover the operating expenses of the WCF in its early years and the support from the Taiwan International Cooperation and Development Fund (TaiwanICDF) which seeded the WCF with a US$ 3 million investment used to support the WLB3 first loss. The US$10 million investment from the DFC will support WLB4Climate and future issuances of the WLB Series while the $1M partnership with KOICA will act as first loss to the US DFC investment.
The WCF addresses persistent hurdles of the lack of catalytic capital for scaling gender-lens investing by encouraging investment from new private sector investors. Specifically, the WCF provides first-loss capital in the form of subordinated notes to gender-lens innovative financial instruments such as IIX’s WLB Series. This first-loss capital mobilizes private sector investors by reducing the risk to such investors, thereby catalyzing private sector participation into gender-lens investments that empower underserved women and women entrepreneurs in developing countries.
IIX launched the first of the WLB Series, the world’s first impact investing instrument to be listed on a stock exchange, in 2017. Following the success of the WLB1, IIX issued the US$12 million WLB2 in January 2020 and US$27.7 million WLB3 in December 2020. Each issuance continues to grow the series which is set to include new sectors and expand the geographical footprint of gender-lens investing with the introduction of new impact themes.
Borrowers from the third issuance of the Bond series reported that water and sanitation facilities obtained through financing from the Bond have been critical to their pandemic resiliency, improving health outcomes with the added benefit of increasing borrowers’ incomes by allowing them to utilize their time for employment. From preparing women farmers to better respond to environmental shocks and maintain their yields through stresses caused by climate change-related extreme weather events to financing cleaner electronic transport and solar rooftop panels, WLB4Climate is expected to impact an estimated 500,000 underserved women and girls across Asia.
*Addendum: Information pertaining to the Korean International Cooperation Agency (KOICA) added Fri Dec 17th, 2021.