Fiji has become the first developing country to issue a green bond in its bid to raise $100m (US$50m) for climate change mitigation, adaptation, and other environmental-friendly projects.

The Fijian Government also plans to put proceeds from the bond towards its goal of achieving 100% renewable energy and reducing 30% of its CO2 emissions in the energy sector by 2030.

With climate change challenges such as rising seas, changing weather patterns and severe weather events threatening Fiji and other Pacific Islands, Fijian Prime Minister, Frank Bainimarama said his government is setting an example to other climate vulnerable nations of what can be done to boost climate resilience projects across Fiji.

“By issuing the first emerging country green bond, we are also sending a clear signal to other nations that we can be creative and innovative in mobilizing funds and create win-win outcomes for countries and investors in adapting to the serious effects of climate change,” said Bainimarama.

He added that as President of COP23, he has made access to climate finance a key pillar at the upcoming meeting in Bonn, Germany.

World Bank Group President Jim Yong Kim said “with this bond, Fiji has demonstrated that green capital markets can be created in emerging economies, and that all countries, big and small, have an important role to play in facilitating climate solutions”.

“As it takes the helm of COP23, Fiji is uniquely positioned to inspire other countries to meet their respective targets and build resilience against climate change.”

The Fijian Government was able to issue the green bond with technical assistance from the World Bank and the International Finance Corporation (IFC) under the Capital Markets Development Project supported by the Australian Government.

Green bonds are fixed income instruments used to raise funds where investors can support environmentally sound projects while receiving interest payments or coupons on their investment over time. They can either sell the bond on the secondary market or hold onto it until maturity, where they receive the original amount invested.

Investors including pension funds, insurance companies, asset managers, financial institutions as well as ‘mum and dad’ investors have the opportunity to subscribe to the bond.

The bonds issued between 1 November 2017 – May 2018,  will mature between 1 November 2022 and 1 November 2030, with interest rates of 4% and 6.3%.