Structured Products for Sustainable Development

Capital Markets DepartmentInvestor Relations

1225 Connecticut Ave NWWashington, DC 20433 USA

Focus on Equity-Linked Green Bonds

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What is The World Bank? An international organization owned by 188 member countries – its owners are

its clients. Purpose is to end extreme poverty and promote shared prosperity in a sustainable manner.

The world’s largest source of development finance and expertise. 60 years of financing development projects. About USD 150 billion in loans outstanding in about 80 countries.

Largest shareholders are: US, Japan, China, Germany, UK and France; about 10,000 staff in 130 offices – most are in the Washington, DC headquarters.

International Bank for Reconstruction and Development (IBRD, called “World Bank”) is rated AAA/Aaa based on its capital, reserves and prudent financial policies.

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The World Bank Group

IBRD and IFC both issue bonds in the capital markets. They share the same overall development goals, but are legally separate entities. Each entity has its own risk profile and capital structure.

IBRD

International Bank for Reconstruction and Development

Issuer of World Bank

(IBRD) Bonds

Lends to governments of

middle-income and creditworthy low-income countries.

IFC

International Finance

Corporation

Promotes development by financing private sector enterprises in developing countries.

MIGA

Multilateral Investment Guarantee

Agency

Promotes foreign direct investment into developing countries by offering political

risk insurance (guarantees) to

investors and lenders.

ICSID

International Centre for the Settlement

of Investment Disputes

Provides international facilities for

conciliation and arbitration of

investment disputes.

IDA

International Development Association

Provides interest-free loans —called

credits— and grants to governments of the

poorest countries

Funds raised from donors

Issuer of IFC Bonds

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Distribution by Sector (Average shares over FY11-FY15)

What We Support TodayIBRD Lending by Sector and Region

Distribution by Region (IBRD Commitments in US$ Millions)

4% 5%

14%

8%

13%

5%

24%

18%

9%

Agriculture EducationEnergy FinanceHealth & Social Services Industry and TradePublic Services & Mgmt TransportationWater

-

4,000

8,000

12,000

16,000

20,000

24,000

28,000

FY11 FY12 FY13 FY14 FY15

South AsiaMiddle East and North AfricaLatin America and the CaribbeanEurope and Central AsiaEast Asia and PacificAfrica

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Country Partnership Framework

Projects follow the “World Bank Project Cycle” within the Country Partnership Framework to:• Contribute to the twin

goals (end extreme poverty and promote shared prosperity);

• Ensure social, environmental and governance (ESG) aspects are covered;

• Achieve expected outcomes.

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IBRD’s Aaa/AAA rating is based on a solid financial structure, conservative financial policies and consistent performance, as well as support and capital backing from its shareholders.

Why Investwith the World Bank?

Track Record• Issuing debt since 1947; triple-A rating for over 50 years.

Safety• Strong balance sheet as result of prudent financial policies. • Funds only extended to sovereigns and for sovereign-guaranteed projects. • Loans have always been repaid; no loan write off or capital call. • Diversified 188 sovereign shareholders & recognized preferred creditor status.

Products• Demand-driven funding; offer a wide range of instruments to fulfill various needs of

diverse investor groups.• All bonds fund the World Bank’s sustainable programs aimed at achieving a positive

social and / or environmental impact. Development Mandate

• Provides financial solutions for sustainable and socially equitable economic development to end poverty increase income equality

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Sustainable Investment Focus Investors are incorporating environmental, social and governance criteria in

their investment decisions. Because of the overall purpose of the World Bank and our policies, all World

Bank bonds are attractive for ESG/SRI investors. The World Bank partners with investors and financial intermediaries to

customize sustainable investment-focused products, including for investors concerned with climate change.

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World Bank

Funding volume has grown as a result of financing increased lending volumes following the global financial crises.

Funding Volumes

10 11

18

28

22

16 1722

19

12 1310 11

19

44

3429

40

24

51

5856

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Annual Funding Volumes Fiscal years 1995-2016, US$ billions

Note: World Bank fiscal years begin on July 1st and end on June 30th*Projected

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World Bank Funding

The World Bank has issued in 57 different currencies since 1947.

Issued in 21 currencies in FY2015.

Has been the first foreign issuer in many currencies: Romanian leu, Uruguayan peso, South Korean won.

Investors benefit from currency exposure with triple-A credit risk.

Currency MixCurrencies of Issuance in FY2015 US$58 billion total

*OTHER CURRENCIES: BRL, CNY, COP, INR, JPY, MXN, NGN, NOK, PLN, RUB, SEK, TRY, ZAR, ZMW

AUD2%CAD

2%EUR9%GBP

2%NZD3%

SGD2%

OTHER*6%

USD74%

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World Bank Funding

Benchmark Bonds,Global Bonds― AUD, CAD, EUR, GBP, NOK,

NZD, TRY, USD, ZAR

Other Plain Vanilla Notes ― Local / Non-Core Currencies*

Structured Notes― Callable and puttable― Floors or collars― Steepeners and R-FRN― Equity-linked― Commodity-linked― Weather and Natural Hedges

Product MixAnnual Issuance Fiscal years since 2000; in US$ billions

*Non-Core Currencies: Australian dollar, Brazilian reais, Botswana pula, Canadian dollars, Chilean peso, Chinese renminbi, Colombian peso, Czech koruna, Ghanian cedi, Hong Kong dollar, Hungarian forint, Indian rupee, Japanese yen, Malaysian ringgit, Mexican peso, New Romanian leu, New Turkish lira, New Zealand dollar, Nigerian naira, Norwegian krone, Philippine peso, Polish zloty, Russian ruble, Saudi riyal, Singapore dollar, Slovak koruna, South African rand, South Korean won, Swedish krona, Swiss franc, Thai baht, Turkish lira, Ugandan Shilling, Zambian kwacha

0

10

20

30

40

50

60

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Benchmark/Global Bonds Other Plain Vanilla Bonds Structured Notes

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World Bank Funding

Structured Bonds

Structured Transactions Represents 20% of the annualfunding raised by the World Bank

Liquidity Buyback program Listing upon request

Design and Customization The World Bank offers customized solutions to investors

Execution Reverse inquiries – high confidentiality

Public transactions

Documentation Standard Docs – IBRD’s GDIF

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World Bank Funding

Type of Structures

1Interest Rate linked- Callable fixed, step-ups, zeros- Capped FRN- Range Accruals

2Equity Index-linked- iSTOXX Europe ESG- Euro Stoxx, Nikkei or any other major index

3 Currency Basket linked

4 Target Volatility Notes

5 Dynamic Assets Allocation

6 Commodity Linked Products

7 Disaster Risk Transfer Products

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World Bank

Same financial terms and risk as other World Bank bonds

Key elements of the World Bank’s Green Bond Process

1. Defined eligibility criteria(with a second opinion)

2. Established project selection process.

3. Ring-fenced bond proceeds (held in a separate account) earmarked for eligible projects

4. Reporting on projects supported including the positive climate impact

Green Bonds

Transparency

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1. Project Selection, Due Diligence, Monitoring?

2. Project / Country Risk?3. Liquidity Risk?4. Financial terms?5. Transparency?

The Green Bond StoryDeveloping the World Bank Green Bond

GreenProjects

?Education

Agriculture

Nutrition

Environment

Infrastructure

Health

Social

Challenges

2007: Swedish & Norwegian public

pension funds approach the World Bank through

their bank (SEB)

Green Fixed Income

Investment?

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1. World Bank Project Cycle2. World Bank is AAA/Aaa3. Bond is Tradable4. Standard Return & Terms5. Impact Reporting

The Green Bond StoryA Green Bond Market Emerges

Green Projectsin borrowing member countries

Transport Efficiency Waste Management

Reforestation

Sustainable Forest Management

Technologies to Reduce GHG Emissions

Solar Power

Energy Efficiency Wind Power

Intermediaries Issuers

+ other Supranationals, Agencies, Corporates, ABS, etc

Solution

Investor

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Mitigation Solar and wind installations Funding for technologies that result in

significant reductions in GHG emissions Rehabilitation of power plants and

transmission facilities to reduce GHG emissions

Greater efficiency in transportation, including fuel switching and mass transport

Waste management (methane emission capture)

Energy efficient building construction Reforestation and avoided deforestation

Types of ProjectsSupported by World Bank Green Bonds

Adaptation Protection against extreme events, such

as floods and droughts (including reforestation and watershed management)

Food security improvement and stress-resilient crops (to slow down deforestation)

Sustainable forest management and avoided deforestation

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Supporting Sustainable Development

Overlaying Green Bond Process in World Bank Project Cycle: World Bank projects address

development challenges while ensuring that social, environmental, and governance (ESG) aspects are covered;

Green bond process builds from existing World Bank systems and disclosures.

All projects are designed to meet specific development outcomes.

Green Bonds - Project Cycle

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Green Bond Impact Reporting is Evolving with Investor and MDB Collaboration November 2013: During World Bank Treasury Green Bond

Symposium, participants highlight importance of impact reporting and encourage MDBs to harmonize metrics

2014-2015: World Bank collaborates with Blackrock, Zurich Insurance, Ceres Green Bond Working Group investors and others on expectations for impact reporting

2014: World Bank convenes informal working group on impact reporting harmonization (including AfDB, EIB and IFC) to discuss a framework for impact reporting

January 2015: World Bank shares draft of its first comprehensive impact report with investors for feedback using agreed framework

March 2015 Joint Report: World Bank-lead informal working group publishes ‘Working Towards a Harmonized Framework for Impact Reporting’ to propose a framework for reporting and core indicators for two sectors: Renewable Energy & Energy Efficiency (RE/EE)

July 2015: World Bank Green Bond Impact Report: IBRD publishes its first comprehensive green bond impact report

December 2015 and ongoing: larger MDB working group on impact reporting and harmonization includes original informal working group members (AfDB, IBRD, IFC, EIB), plus AfD, ADB, EBRD, FMO, IADB, KfW, NIB, and others, coordinated by EIB. Revised harmonized framework published in December 2015.

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World Bank Green Bond ReportingIndividual project documentation

http://www.worldbank.org/projectsSummarized green project slides:

http://treasury.worldbank.org/cmd/htm/MoreGreenProjects.html

Annual Green Bond Newsletters: http://treasury.worldbank.org/cmd/htm/WorldBankGreenBondNewsletters.html

Comprehensive Impact Report:http://treasury.worldbank.org/cmd/pdf/

WorldBankGreenBondImpactReport.pdf

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3

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Growth of the Green Bond Market

Source: Bloomberg, World Bank and other public sources

World Bank (IBRD) has issued about USD 9 billion with over 120 green bond transactions in 18 currencies

* As of April 30, 2016

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World Bank

Since the first equity-linked bond launched in the summer of 2014, the World Bank has raised over US$600 million through 10+ individual bonds linked ESG equity indexes. World Bank’s Equity index green bonds are

linked to ESG indexes They’re offering long durations (10+years) Different pay-outs can be built in the structure They have been bough worldwide and by

a well diversified investor representation:― Approx. US$200 million was purchased

by institutional European investors― Approx. US$400 million was placed with

retail investors in Europe, the US, and high net worth investors in Asia (Hong Kong, Singapore).

Equity-Linked Green Bonds

iSTOXX Europe ESG Index-linked Green Bond

Summary Terms and Conditions

Total Amount: USD$50 million

Settlement Date: 3 July 2015

Maturity Date: 3 July 2025

Coupon: Zero Coupon

Redemption Amount:

100% + a Supplemental Payment Amount linked to performance of the iSTOXXEurope ESG Select 30 Index multiplied by a Participation Rate (PR).

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Summary Terms and ConditionsTotal Amount: US$600 million

Settlement Date: 3 March 2015

Maturity Date: 3 March 2025

Coupon: 2.125% (semi-annual)

Issue Price: 99.108%

Lead Managers: Deutsche Bank, Morgan Stanley, SEB

http://treasury.worldbank.org/cmd/htm/Largest_USD_Green_Bond.html

ExampleWorld Bank US$600m Green Bond

By Geography

By Investor Type

Americas39%

Europe28%

Middle East/North

Africa17%

Asia16%

The bonds were placed with 25 investors, including AP2, AP4, Blackrock, Deutsche Bank Treasury, Everence, Mirova, Nikko AM, Nippon Life Insurance, Trillium, UN Joint Staff Pension Fund, and ZürcherKantonalbank.

Several investors highlighted their appreciation for the World Bank’s practice to support transparency around its green bond program, as well as the financial characteristics and beneficial climate aspects of World Bank Green Bonds.

Asset Managers

43%

Banks / Corporates

31%

Pension 11%

Insurance15%

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Summary Terms and ConditionsTotal Amount: EUR550 million

Settlement Date: 20 March 2014

Maturity Date: 20 March 2017

Coupon: 0.25% (annual)

Issue Price: 99.678%

Lead Managers: Crédit Agricole CIB, Morgan Stanley, SEB

http://treasury.worldbank.org/cmd/htm/First_World_Bank_Green_Bond_Benchmark_Euros.html

ExampleWorld Bank EUR550m Green Bond The bonds were placed with 21 investors, including

ACTIAM (formerly SNS AM), Aegon Asset Management, AP2, APG, Barclays Treasury, Blackrock, Caisse Centrale de Reassurance, Ikea Group, Mirova, Natixis Asset Management, Pictet, SEB Asset Management, Standish Mellon Asset Management Company LLC, Zurich Insurance Group and Zwitserleven.

Bank treasuries / corporates

42%

Asset managers

22%

Insurance companies

19%

Official institutions

9%

Pension funds8%

Americas10%

Europe90%

By Geography

By Investor Type

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• Green bonds have raised awareness with financial market participants for the need for private sector financing to tackle the climate challenge and include climate risks and opportunities in their investment decisions.

• More issuers, are recognizing the benefits of issuing green bonds for business reasons and to enhance their brand and are expanding investment opportunities for investors; retaining integrity is key.

• Green bonds are catalyzing a development of changing investor expectations in the fixed income markets – investors are asking for social and environmental impact for all investments and require information to include this in their investment decisions.

• We are working with issuers to help them understand the product, its costs and benefits, and with issuers, investors, intermediaries and market participants to create more financial products that support climate change programs.

Green Bonds

Potential

© World Bank

Images: © The Clearing/World Bank

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AnnexProject Stories

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Description

Purpose: To improve sustainable water resources management and increase access to sanitation in Brazil.

Expected Results (include): Integrated tools for preparedness and response such as a warning system expected to cover 70% of the State’s territory. Funds will finance a water treatment plant expected to remove 1,590 tons of BOD per year and provides improved sanitation services for about 164,000 people. Reforestation of 2000 hectares.

IBRD Financing:$225 million

Development ChallengeThe project addresses disaster risk linked to flooding by improving metropolitan coordination and planning mechanisms for the management of urban water. Project Description The project also increases the efficiency of water supply services, access to improved sanitation, and wastewater treatment. Furthermore, the project supports improved watershed management and restoration of forests and improve the quality of surface and coastal waters in selected watersheds.

BrazilEspirito Santo Integrated Sustainable Water Management Project

For more information:http://www.worldbank.org/projects/P130682?lang=en

© World Bank

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© Steve Harris/World Bank

Country Challenge In China, millions of households rely on the agriculture sector for their livelihood. The agricultural sector, however, has had widespread negative impacts on the environment because of inadequate farming techniques involving misuse of land leading to desertification, over-use of synthetic pesticides and fertilizers without adequate environmental controls. In addition, agriculture is responsible for 50% of China’s methane emissions (a potent greenhouse gas).Project Goals This project supports cleaner, healthier farmyard environments, along with the reduction of greenhouse gas emissions through methane capture and combustion to generate energy, and the reduction of burning of coal and firewood.

For more information: http://www.worldbank.org/projects/P096556/eco-farming-project?lang=en&tab=overviewVideo: http://www.youtube.com/watch?v=z1Obm7vmXqg&feature=player_embedded

Description

Purpose: To reduce greenhouse gas emissions and deliver economic benefits through biogas systems in rural communities.

Expected Results (include):• CO2eq. emissions in the project area are expected

to be reduced by 800,000 - 1,000,000 tons per year.

• 400,000- 500,000 rural households benefit with cleaner biogas-based cooking and heating systems.

IBRD Financing: US$120 million

ChinaEco-Farming Project

© World Bank

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Country Challenge 75% of Colombia's population currently lives in cities and most of these urban residents rely on the public transportation system. Yet, public transportation is the cause of many of these cities’ problems, including serious traffic congestion, high incidences of accidents and crime, unhealthy air, and pollutants responsible for 62% of Colombia's carbon emissions. Project Goals. The Colombian government and the World Bank are continuing to work together through the support to the National Urban Transit Program (NUTP). Building on the success of Transmilenio, a rapid bus system in Bogotá, the project is designed to improve transport efficiency and accessibility, reduce fuel use per kilometer, as well as pollutant emissions in five additional cities: Barranquilla, Medellin, Bucaramanga, Cartagena, and Pereira.

For more information: http://www.worldbank.org/projects/P117947/support-national-urban-transport-program-project?lang=enVideo (“National Urban Transport Program”): http://www.youtube.com/watch?v=_HzUjAZvviU; https://www.youtube.com/watch?v=1K9O_gKB1V8

Description

Greater efficiency in urban mass transport

Expected Results (include):• Reduction of average travel time for low income

riders. • Reduction of accidents and pollution (including

greenhouse gases) associated with bus transport services

• Increased access to the disabled, and other riders with special needs.

IBRD Financing: • $300 million – 2nd Add Financing Integrated Mass

Transit System• $350 million – Support to the National Urban

Transit Program

ColombiaNational Urban Transit Program

© World Bank

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IndonesiaCoral Reef Rehabilitation and Management

Development ChallengeSustainable management of coral reef resources, associated eco-systems and bio-diversity for the welfare of the communities in seven selected districts of five provinces in the country. Project Description The project helps develop Conservation Areas where fishing will be restricted while providing communities rights to other areas for sustainable fishing and helps them develop income generating activities that are compatible with healthy marine ecosystems. It supports the government efforts in better monitoring and management of its marine conservations areas. Objectives include institutional strengthening for decentralized coral reef management, development of ecosystem-based resources management, strengthening sustainable marine-based economy; and project management, coordination and learning.

For more information:http://www.worldbank.org/projects/P127813/coral-reef-rehabilitation-management-program-phase-iii?lang=en

Description

Purpose: To help Indonesia protect and sustainably manage its unique coral ecosystems in several selected districts and five provinces in the country.

Expected Results (include): Finance projects that support preparation of zoning plans, application of integrated coastal management, sustainable fisheries management in selected fisheries management areas and, piloting community rights-based approach. Monitoring and evaluation of project performance also evaluated.

IBRD Financing: $47.38 million

© World Bank

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© World Bank

Country Challenge About 80% of Mexico's energy comes from fossil fuels (including imported gas). Residential electricity use is growing faster than Mexico’s GDP, or about 3.7 percent/year, and accounts for about a quarter of all electricity use. Air conditioning, home appliances, and electronics are expected to be the main growth areas. In response, the government has initiated energy efficiency programs for the residential sector. Project Goals The project financed the Programa Luz Sustentable and the appliance exchange program which supported free exchange of efficient light bulbs and a loan/subsidy program for efficient appliances targeting lower income households

For more information: http://www.worldbank.org/projects/P106424/efficient-lighting-appliances?lang=en&tab=overviewVideo: https://www.youtube.com/watch?feature=player_embedded&v=_cLgcYCQUPI

Description

Purpose: To promote the efficient use of energy and to mitigate climate change by increasing the use of energy efficient technologies in the residential sector.

Expected Results (include): Cumulative over 5 years (2-phase program):

• 45.8 million inefficient light bulbs and 1.9 million old and inefficient refrigerators and air conditioners replaced

• 3.32 million tons of CO2eq. emissions reduced cumulatively

• 50-60 % electricity saved in residential households.• 10,000 GWh cumulative energy savings.

IBRD Financing: US$250.63 million

MexicoEfficient Lighting and Appliances

© World Bank

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Internet: http://treasury.worldbank.org/debtsecuritieshttp://treasury.worldbank.org/greenbondshttp://crinfo.worldbank.orghttp://www.worldbank.org/en/topic/climatechange

Phone: +1 202 477 2880 Fax: +1 202 477 8355Email: debtsecurities@worldbank.orgAddress: 1225 Connecticut Avenue, NW

Washington, DC 20433, USA

Pricing SourcesBloomberg IBRD <Govt> <Go> or IBRD <Go>;Discount Notes WBDN <Go>

For more information, contact us:

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All photos, graphics and content © World Bank • This presentation has been prepared by the World Bank (International Bank for Reconstruction and Development, IBRD)

for information purposes only, and the IBRD makes no representation, warranty or assurance of any kind, express or implied, as to the accuracy or completeness of any of the information contained herein.

• No Offer or Solicitation Regarding Securities. This presentation may include information relating to certain IBRD securities. Any such information is provided only for general informational purposes and does not constitute an offer to sellor a solicitation of an offer to buy any IBRD securities. All information relating to securities should be read in conjunction with the appropriate prospectus and any applicable supplement and Final Terms thereto, including the description of the risks with respect to an investment in such securities, which may be substantial and include the loss of principal. The securities mentioned herein may not be eligible for sale in certain jurisdictions or to certain persons.

• Consult with Advisors. Investors considering purchasing an IBRD security should consult their own financial and legal advisors for information about such security, the risks and investment considerations arising from an investment in such security, the appropriate tools to analyze such investment, and the suitability of such investment to each investor's particular circumstances.

• No Guarantee as to Financial Results. IBRD does not warrant, guarantee or make any representation or warranties whatsoever, express or implied, or assumes any liability to investors regarding the financial results of the IBRD securities described herein.

• Each recipient of this presentation is deemed to acknowledge that this presentation is a proprietary document of IBRD and by receipt hereof agrees to treat it as confidential and not disclose it, or permit disclosure of it, to third parties without the prior written consent of the IBRD. All content (including, without limitation, the graphics, icons, and overall appearance ofthe presentation and its content) are the property of the IBRD. The IBRD does not waive any of its proprietary rights therein including, but not limited to, copyrights, trademarks and other intellectual property rights.

Acknowledgements and Disclaimers