What are Supranational Bonds? | World Bank | Asian Development Bank | European Investment Bank |

 

Let’s break down Supranational Bonds into two parts

1) Bonds and

2) Supranational Entities

(1) Bonds

Bonds are financial instruments issued by either a government or corporation to borrow funds for projects or operations and in return provide coupon(interest) and at maturity returns the principal.

(2) Supranational Entities

Supranational entities are institutions formed by two or more central governments in order to promote social and economic development of member countries.

The Supranational entities are World Bank, International Monetary Fund (IMF), European Investment Bank (EIB), Asian Development Bank (ADB), etc.

ü Supranational Bonds

Bonds issued by Supranational Entities are known as Supranational Bonds.

These entities issue bonds to raise funds to support development of member nations, to finance infrastructure projects, for social causes like poverty alleviation in under developed countries, for environmental issues like climate change, etc.

l Examples of Supranational Bonds are

→ Sustainable Development Bonds issued by World Bank

→ Theme Bonds issued by Asian Development Bank

→ Climate Awareness Bonds issued by European Investment Bank

#worldbank #imf #eib #adb #sustainabledevelopmentgoals #economy #bonds