World Bank Prices $120 Million Spekboom Restoration Outcome Bond to Fund Large-Scale Ecosystem Recovery in South Africa

The World Bank has priced a $120 million Spekboom Restoration Outcome Bond aimed at supporting large-scale land restoration and job creation in South Africa’s Eastern Cape province. The 14-year bond, issued by the International Bank for Reconstruction and Development, matures in 2040 and represents the longest-dated outcome bond structured by the institution to date.

The instrument is designed to mobilise private capital for ecosystem restoration while linking investor returns to measurable environmental outcomes. It will help finance the expansion of a 50,000-hectare spekboom restoration project developed by Imperative, a private-sector company specialising in ecological restoration. The programme is expected to create around 11,000 jobs through activities such as planting, harvesting, monitoring and ongoing land management, with participation from small and medium-sized enterprises in the region.

Spekboom, a drought-resistant succulent native to South Africa, is valued for its ability to sequester carbon and improve soil and water retention. Its restoration is intended to support biodiversity recovery and strengthen ecosystem resilience in degraded landscapes.

The World Bank has stated that the bond structure combines full principal protection with performance-linked returns. Investors receive a fixed coupon, alongside potential additional payments linked to carbon removal outcomes generated by the project. A portion of the return is also tied to revenue from carbon removal unit sales under a long-term offtake agreement with Amazon, which has committed to purchasing a significant share of the credits expected from the project.

Anshula Kant, Managing Director and World Bank Group Chief Financial Officer, said the structure demonstrates how capital markets can be used to support large-scale restoration efforts while aligning financial returns with measurable development and environmental outcomes. She added that the approach is intended to strengthen livelihoods and create employment through nature-based solutions.

Under the arrangement, proceeds from the bond are used to support the World Bank’s wider sustainable development lending activities, while a portion of the foregone coupon is redirected as upfront financing to the restoration project through a hedging arrangement. Additional return components are linked to the performance of carbon removal units generated by the project.

BNP Paribas acted as sole lead manager and bookrunner for the transaction. The bank described the structure as an example of how coordinated participation between multilateral institutions, corporate buyers and investors can mobilise private capital for environmental projects while maintaining capital protection and a defined risk-return profile.

The bond has attracted participation from a range of institutional investors, who highlighted its combination of environmental impact and financial structure. Investors noted its potential to scale nature-based restoration while providing exposure to measurable ecological outcomes linked to carbon sequestration and biodiversity recovery.

The Spekboom project is intended to restore degraded land across South Africa’s Eastern Cape, contributing to carbon capture, soil regeneration and broader ecosystem recovery. The initiative reflects growing interest in financial instruments that directly link investor returns to environmental performance, particularly in the field of nature-based climate solutions.

The transaction has been listed on the Luxembourg Stock Exchange, with settlement scheduled for 30 April 2026.