The World Bank has two goals: to eliminate extreme poverty and promote shared prosperity in a sustainable way. To help finance the pursuit of these aims, it issues fixed income securities that can constitute investable impact opportunities. 

Impax recently collaborated with the World Bank’s International Bank for Reconstruction and Development (IBRD) to structure an innovative impact bond. The proceeds from the US$50 million bond, issued in February 2023, will finance 300,000 water purifiers for schools and other institutions in Vietnam.

This project will have several positive outcomes:

  1. Improving access to clean water for up to two million children
  2. Replacing the carbon-intensive wood-burning process traditionally used to boil and purify water
  3. Empowering women in communities by freeing up time that would have been spent collecting firewood and boiling water 

The CO2 emissions avoided from the use of purifiers will be turned into verified carbon credits issued on the Verra Registry, a third-party platform that facilitates the transparent listing of projects and trading of credits. Carbon credits will then be sold to Verra participants to fund coupons for bond investors.

Proceeds from the sale of the first 1.8 million tonnes of carbon credits will be earmarked for bondholders. The World Bank estimates this will generate returns approximately one percentage point above those of similar conventional securities, offering Impax and other issuance investors exposure to potentially higher-yielding securities.​

Impax has worked with the IBRD on sustainable development bonds before. In 2018, we collaborated to develop a ground-breaking impact security: a gender-themed bond. Unlike our most recent collaboration, which supported specific outcomes, this bond funded several projects across various regions. It was intended to highlight the World Bank’s work in addressing gender inequality.

The proceeds from the three-year US$4mn issuance were used to support programs that provide girls with access to quality education and support to stay in school. It also supported work to address gender-based violence in the health, education and infrastructure sectors. It served as seed funding to support empowerment projects for rural women in India’s Bihar state, including self-help groups, access to finance and links to markets. In Togo, a World Bank Africa Gender Innovation Lab project that the bond partially funded enabled a 40% increase in profits for women business owners.

We are proud to have partnered in the development of this bond, in which we were the only investor, as it pairs the pursuit of financial goals with support for a social purpose, mobilizing finance for development. We remain attentive to opportunities that the World Bank and other supranational bodies create that can support the transition to a more sustainable global economy. 


Important Information

Key Risks 

  • Market risk: investments in funds or securities are subject to market fluctuations, so they can fall as well as rise in value. 
  • Currency risk: Fluctuation in exchange rates may reduce investment gains or income and increase losses. Additional risk should be considered where the Fund’s base currency differs from the currency of your own investments. 
  • Emerging market risk: emerging markets’ future is dependent on (i) widespread adoption of their products and services and (ii) timely implementation of anticipated changes in local governmental policies; investments in companies in emerging markets or less developed countries in the region may face more political, economic or structural challenges than developed countries, putting your money at greater risk. Emerging markets securities may be negatively impacted by changes in government policies, changes in taxation, restrictions in foreign investment and the movement of money from one country to another, currency fluctuations and other developments in the laws and regulations of countries in which investments may be made.Emerging marketsor less developed countries may face more political, economic or structural challenges than developed countries, putting your money at greater risk. ​ 
  • Liquidity risk: Substantial selling by shareholders may necessitate the Investment Manager having to sell investments, incurring losses that would otherwise not have arisen.  
  • Sustainability risk: Sustainability risks are environmental, social and governance events or conditions whose occurrence could have an actual or potential material negative impact on the value of a security or fund and all known types of risk of a fund. Sustainability risks may result in a material negative impact on the value of an investment and performance of the portfolio. Sustainability risks are environmental, social and governance events or conditions whose occurrence could have an actual or potential material negative impact on the value of the portfolio and all known types of risk of the portfolio.​ Governmental liberalisation of basic services and increased environmental legislation may not occur at the anticipated rate. The costs of technology in environmental markets may not continue to fall or may not maintain price competitiveness. ​ 
  • Market fluctuations: Potential investors should note that the investments of a fund are subject to market fluctuations and that there can be no assurance that any appreciation in value will occur. The value of investments and the income from them, and therefore the value of, and income from a fund’s shares, can go down as well as up and an investor may not get back the amount invested. 
  • Political or regulatory risks: The value of a security or fund’s assets may be affected by uncertainties such as international political developments, changes in government policies, changes in taxation, restrictions in foreign investment and currency repatriation, currency fluctuations and other developments in the laws and regulations of countries in which investments may be made.  
  • Capital risk – the value of your investment will vary and is not guaranteed. It will be affected by changes in the exchange rate between the base currency of the portfolio and the currency in which you subscribed, if different.​ 

Nothing presented herein is intended to constitute investment advice and no investment decision should be made solely based on this information.  Nothing presented should be construed as a recommendation to purchase or sell a particular type of security or follow any investment technique or strategy.  Information presented herein reflects Impax Asset Management’s views at a particular time.  Such views are subject to change at any point and Impax Asset Management shall not be obligated to provide any notice.  Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary.  While Impax Asset Management has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein.  No guarantee of investment performance is being provided and no inference to the contrary should be made.

Anthony Trzcinka, CFA®

Senior Portfolio Manager, North America

Anthony is the Portfolio Manager for the Impax Core Bond strategy and is also a member of the Multi-Asset Sustainable Allocation team. Tony has been running impact bond products for almost two decades has overseen multiple strategies since joining Impax in 2003.

Prior to working at Impax, Tony spent three years as an Assistant Vice President at AEW Capital Management, a $90 billion Boston-based asset manager where he focused on analysis of public and private debt.

Tony is a CFA® charterholder and a member of the CFA Society Boston. He has an MBA from Northeastern University and a bachelor’s degree from the University of Massachusetts Amherst.

Authored Insights

Innovating for impact: Impax and the World Bank

From empowering women to improving access to clean water and reducing emissions, our collaboration with the World Bank has produced fixed income securities targeting gender and climate-related goals

19 May 2023
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