'Rhino bond' breaks new ground in conservation finance
July 18, 2019
https://www.cnbc.com/2019/07/18/what-is-a-rhino-bond-here-is-all-you-need-to-know.html
Key Points
- The $50 million Rhino Impact Bonds (RIB) will be the world’s first financial instrument working toward the conservation of a species at the risk of extinction.
- Black rhino numbers have fallen from 65,000 in the 1970s to about 5,500 presently.
- The bond, expected to launch in the first quarter of 2020, looks to boost the black rhino population by 10% globally.
Investors will soon be able to buy bonds that aim to increase the population of the endangered black rhino, and reward investors only when the numbers of these animals rise.
The $50 million Rhino Impact Bonds (RIB) will be the world’s first financial instrument working toward the conservation of a species at the risk of extinction.
CNBC takes a look at the concept behind an RIB.
Why rhinos?
Black rhino numbers have fallen from 65,000 in the 1970s to about 5,500 presently. The species is said to be extremely vulnerable to extinction in the wild. According to the Zoological Society of London (ZSL), the most critical threat to rhino populations is poaching for the illegal trade in rhino horn products.
What is an RIB?
It’s a $50 million bond (a fixed-income investment instrument) with a five-year term and is aimed at growing the numbers of African black rhinos across five sites in Kenya and South Africa. It covers a total of 700 black rhinos that form about 12% of the world’s entire black rhino population.
“The Rhino Impact Bond (RIB) is the world’s first financial instrument for species conservation, transferring the risk of funding conservation from donors to impact investors by linking conservation performance to financial performance,” according to Conservation Capital, the company arranging the bond offer.
(I guess if it helps Rhinos, I don't see a downside, except if the plan collapses, and leaves the rhinos in a lurch).
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