The Impact Investment Exchange (IIX) has raised $50 million with what it said is the first ‘green and orange’ bond, with proceeds targeted to empower women to advance climate action.
Called the Women’s Livelihood Bond 5 (WLB5), it securitises a portfolio of loans to high-impact enterprises that cannot usually access international capital markets, lead placement agent ANZ said in a Tuesday (Dec 13) press release.
The US$50 million IIX Women’s Livelihood Bond™ 5 is the first sustainable debt security in the market issued in compliance with the Orange Bond Principles and is expected to empower ~300,000 women and girls across Asia and Africa.
December 8, 2022 – SINGAPORE – Impact Investment Exchange (IIX) has successfully closed the Women’s Livelihood Bond™ 5 (WLB5), the fifth issuance in the award-winning Women’s Livelihood Bond™ Series (WLB™ Series), raising US$50 million. The WLB5 will create livelihood and empower ~300,000 women and girls in emerging markets across Asia and Africa, making it the first multi-continent bond in the Series.
IIX’s WLB™ Series are listed innovative financial instruments that use a blended capital structure to pool together a multi-country, multi-sector portfolio of high-impact enterprises focused on advancing gender equality. To date, the Series has mobilized US$128 million, empowering over 1 million women across Asia and Africa to transition to more sustainable, climate-resilient livelihoods, advancing 12 of the 17 United Nation’s (UN) Sustainable Development Goals (SDGs) and accelerating socio-economic recovery post the COVID-19 pandemic. Continuing on the success of previous issuances, the WLB5 makes history as the first sustainable debt issuance to align with the Orange Bond Principles™. Orange Bonds – drawing their name from the orange hue of SDG5: Gender Equality – is the world’s first asset class built by both the Global South and Global North with a mission to build a gender-empowered financial system, particularly for the 99%.
The WLB5 brings in both “orange” and “green” with a portion of the proceeds allocated to empower women to advance climate action. IIX recognizes that the transition to a net-zero future and improved adaptive capacity of emerging markets cannot be achieved with half of humanity – women and girls – left out of the solution. IIX is one of the only women-led Sustainability Bond issuers based in the Global South, with women and people of color comprising the majority of the staff working on the WLB5 issuance to ensure high gender-lens capacity and commitment to inclusion and diversity.
IIX’s CEO and Founder Professor Durreen Shahnaz stated, “As the fifth bond of the WLB™ Series, the WLB5 continues IIX’s mission of transforming the financial system by empowering women throughout communities in emerging markets. The COVID-19 pandemic and the climate crisis have aggravated gender disparity, and women in the Global South are left to bear the brunt of it. The WLB™ Series was created to eliminate these inequalities, and the WLB5 continues this mission while embracing shades of both orange and green.”
The proceeds of the WLB5 will be used to make loans to high-impact enterprises in Cambodia, India, Indonesia, Kenya, and the Philippines that operate across six sectors: microfinance, SME lending, clean energy, sustainable agriculture, water and sanitation, and affordable housing. The WLB5 also complies with the ICMA Sustainability Bond Guidelines, the ASEAN Social Bond Standards, and the UN SDG Impact Standards. The WLB™ Series measures and verifies impact both pre and post-investment using IIX Values™, a digital tool that collects impact data from women at the last mile to ensure they have a value and a voice in the investment and reporting process.
This strong commitment to transparency helps IIX to magnify impact, stabilize returns, and mitigate risks. Previous issuances in the WLB™ Series have had no defaults or delays to coupon payments, even during the COVID-19 pandemic. WLB5 has successfully mobilized capital from a range of institutional and impact-focused investors from across the world including anchor investor, Nuveen (a TIAA-CREF company), Laerdal Finans, Pathfinder New Zealand, and Ceniarth, among others.
Nuveen’s Head of ESG/Impact – Fixed Income Stephen M. Liberatore, CFA, said, “As the first Orange Bond in the market, the WLB5 will set the momentum for many Orange Bond transactions to come in the near future, making it a game changer for the sustainable financing market. IIX’s commitment to achieving meaningful impact and verifying results directly with women at the last mile makes the WLBTM Series the ‘gold standard’ in a market that is facing concerns over rising impact-washing.”
IIX’s WLB5 brings together a number of ecosystem partners from both the public sector and the private sector with an aligned mission to build gender-equal and green capital markets. Partners include United States International Development Finance Corporation (DFC), the United States Agency for International Development (USAID), the Swedish International Development Cooperation Agency (Sida), the Australia Department of Foreign Affairs and Trade (DFAT), Australia and New Zealand Banking Group (ANZ), Standard Chartered Bank, Barclays, Shearman & Sterling, Clifford Chance, Paul Hastings, Cyril Amarchand Mangaldas, TSMP Law Corporation, Chapman Tripp, Vinge, and NetRoadShow.
James Polan, DFC Vice President for Development Credit shared, “IIX has pioneered a unique financial structure that effectively balances risk, returns, and impact. The DFC anticipates the WLB5 will revolutionize capital markets by placing women at the forefront of solutions to achieve a more inclusive, climate-resilient future for all.”
The WLB5 exemplifies how the Orange Bond Initiative™ aims to transition the gender-lens investing space from strategy to action. There is a critical need to go beyond conferences and commitments to mobilizing capital through new and innovative structures that create transformative impact on women and girls. To join the movement, individuals and institutions are invited to sign the Orange Bond pledge available online here. Signatories will be invited to participate in upcoming events, transactions, and other ecosystem engagement opportunities including joining the Advisory Council and applying to be an Approved Certifier.
by Durreen Shahnaz
Right before the pandemic, I spoke at an impact investing conference in New York.
As the founder and CEO of Impact Investment Exchange, I’ve seen how much actual impact impact investing can have — and how it can reinforce old, problematic norms.
As usual, I was among the few women of color invited to speak alongside an otherwise white male panel. And as is typical for women of color at these conferences, I had to endure input on my choice of attire — being asked to avoid wearing an ethnic dress (a saree in my instance) — as well as the casual dismissals of my remarks and the general fawning over “distinguished white men.”
22 March 2022, Mr. Robert Kraybill, Chief Investment Officer and Managing Director, Portfolio Management at Impact Investment Exchange, attended as a speaker at an event jointly hosted by OECD Private Finance for Sustainable Development Community of Practice (CoP – PF4SD) and the Tri Hita Karana Blended Finance Platform.
Mr. Kraybill provided insights into the place of impact measurement, monitoring and transparency in blended finance transactions, in particular on the opportunities and challenges they pose to developing country partners.
Impact Partners PitchFest 2022 kicked off with the APAC region. We received up to 200 applicants and we are excited to share with you the exceptional enterprises that have managed to impress the judges with their world-changing solutions to economic growth with a gender lens.
We hope that through the access and support gained from this event, these enterprises are equipped to scale their impact on the world.
Congratulations to the Impact Partners PitchFest 2022 – APAC winners and finalists!
Also called orange bonds, this relatively new class of sustainable financing aims to remove gender bias and improve women’s equality and living standards in developing countries.
Can orange be the new green? The answer is a resounding yes for supporters of orange bonds, a growing asset class focused on gender lens investing as a form of sustainability financing to narrow the gender gap and improve women’s equality.