UNDP Training on Nature Performance Bonds: The next vista of nature and climate financing

In this self-paced course you will learn about Nature Performance Bonds including what they are and how they can be issued as a means to finance actions to deliver on environmental goals while supporting in the administration of national debt.

 Course type: Self-paced module
 Languages: English, Spanish
 Estimated effort: 2 hours per week
Duration: 6 modules
 Partners:  United Nations Development Programme, Climate Promise, Nature Climate Energy, Sustainable Finance Hub

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Accelerating action on the Sustainable Development Goals (SDGs) and Nationally Determined Contributions (NDCs) will require not only redirecting public and private investments but also tapping into innovative financing mechanisms such as nature performance bonds. These financial mechanisms are particularly relevant as countries are looking to move forward from the impact of the pandemic on public finances.

The Intergovernmental Panel on Climate Change (IPCCC)'s latest report for the region has identified financing as the most reported obstacle for adaptation in terrestrial, freshwater, ocean and coastal ecosystems.

Nature performance bonds allow countries to target sustainable finance in keeping with international environmental goals, which is particularly relevant to the Latin American and the Caribbean (LAC) region as it houses over 40% of the Earth’s biodiversity. Ecosystems in LAC provide valuable climate benefits in the form of carbon mitigation and adaptation to climate impacts. However, they are also valuable to the region’s socio-economic development, with healthy ecosystems providing the basis for agriculture, tourism, fishing and forestry livelihoods. Studies have estimated the annual value of terrestrial ecosystem benefits at USD 15.3 trillion.

Investing in nature allows countries to address the dual crisis of biodiversity and climate while recognizing that nature is a fundamental pillar of sustainable development.

About the course

This course raises awareness about the use of innovative financing mechanisms, particularly nature performance bonds, and how these can be leveraged to meet the SDG and NDC targets in a way that is beneficial to countries in their debt management.

Learning objectives

Module 1:

  • Participants will learn about the global opportunity for debt financing in LAC while broadening their understanding in the thematic financing landscape and the role of different bonds, as well as how Nature Performance Bonds (NPBs) fit into the equation. 

Module 2:

  • Participants will understand the linkages between Nature Performance Bonds (NPBs), the country’s natural capital and sovereign debt while differentiating NPBs, sustainability-linked bonds, and debt (for nature) swaps as well as when they make sense.

Module 3:

  • Participants will learn about the Market standards, the International Green Bond regulatory framework, and will be exposed to the challenges faced by Issuers by understanding the considerations before issuing a Green Bond. 

Module 4: 

  • Participants will learn about the typology of investors who invest in the various debt Instruments and understand investor expectations/indices, while seeing Benefits of Green Bond for Investors and the challenges faced by stakeholders in the Green Bond Market 

Module 5:

  • Participants will be exposed to the life cycle of Thematic Bond Issuance process, the factors that influence Thematic Bond Issuance, the importance of the Debt Sustainability framework in the Issuance process and UNDPs Debt Offerings. 

Module 6:

  • Participants will be introduced to the market dynamics, size, volume and Issuers and the growth of the sustainable bonds market, while learning about the sectoral breakdown of the use of proceeds.

Course topics

Module 1:​ Overview of the LAC context and types of financing instruments ​

  • Module 1 outlines the global opportunity for debt financing in Latin America and the Caribbean (LAC) to accelerate development finance and nature finance and achieve the Nationally Determined Contributions (NDC) outlined in the Paris Agreement. It explains the thematic financing landscape, the role of different bonds, and how Nature Performance Bonds (NPB) fit into the equation.​

Module 2:​ Nature Performance Bonds (NPB) in detail​

  • Module 2 outlines linkages between nature performance bonds, the country’s natural capital, and sovereign debt. It elaborates on the differences between nature performance bonds, sustainability-linked bonds, and debt (for nature) swaps. It covers the benefits of issuing nature performance bonds for sovereign debtors and creditors and explains when nature performance bonds/sustainability-linked bonds and debt for nature swaps make sense.​

Module 3​: Market standards​

  • Module 3 focuses on Green Bond Principles, Climate Bonds Standard and Social Bond Principles. It highlights the sector criteria used by these guidelines. ​

Module 4​: Typology of investors​

  • Module 4 covers the typology of investors who invest in the various debt Instruments discussed in the previous modules. It highlights the benefits of Green Bond for Investors ​and the challenges faced by participants in the Green Bond Market, and helps learners understand investor expectations/indices​

Module 5:​ Lifecycle of a bond issuance​

  • Module 5 covers the issuance process as well as pre and post-issuance, including feasibility, debt sustainability, credit ratings, and monitoring and reporting post-issuance.​

Module 6:​ Market dynamics​

  • Module 6 covers market dynamics, size, volume, and issuers.​

Course completion requirements

All components mandatory

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Course Includes

  • 7 Modules
  • 8 Activities
  • 6 quizzes
  • Course Certificate

Tenke Zoltani
Senior Thematic Debt Advisor, UNDP-SFH Team

Tenke Zoltani is the Senior Thematic Debt Advisor to UNDP and leads the agency’s debt service offering, where she is responsible for the global portfolio. Tenke is also the Founder of Better Finance, a boutique advisory business working at the nexus of impact and ESG, focusing on helping clients integrate the SDGs across impact investing and ESG integration strategies. She holds several Board positions and is an internationally recognised speaker on the topic of impact investing. Based in Switzerland, she has nearly fifteen years’ of experience in the field of sustainable finance across sectors.

Kirthisri Rajatha Wijeweera
Advisor Nature Performance Debt Instruments

Kirthisri (Rajiv) is a senior economist with extensive experience of over 25 years. Currently, Kirthisri serves as Advisor, Nature Performance Debt Instruments at UNDP, HQ — working with both Sustainable Finance Hub (SFH) and Nature Climate Energy (NCE) teams. His current role involves supporting issuances of sovereign thematic debt globally. He is also UNDP technical lead for the Fossil Fuel Subsidy Reform program.

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