The Breathe Better Bond


The Breathe Better Bond aims to drive finance at scale to emerging market local governments for investing in projects that will reduce urban air pollution, improving health and economic outcomes while mitigating greenhouse gas emissions.

The Problem
Air pollution results in disease, death, and lost economic opportunity – all of which disproportionately affect developing countries. It is estimated that $4.8 trillion in private sector capital is required by 2040 to avoid 7-9 million annual deaths that will be caused by airborne contaminants, resulting in $4-6 trillion in economic welfare losses.

The Solution
The Breathe Better Bond is a debt instrument for emerging market local governments to finance air pollution reduction projects in cities that will result in significant future savings, for example through reduced healthcare costs and higher GDP. Bond proceeds will be used by local governments to finance projects that significantly reduce air pollution, in sectors such as transit, fuel switching, waste, industrial efficiency etc. It uses credit enhancement and a performance mechanism to enable access to finance.

Target Impact
The proponent, International Finance Corporation, plans to initially focus on south/southeast Asia, where more than 70% of poor cities suffer worsening air quality. The impact of the Breathe Better Bond for local governments and communities would be multi-faceted: reduced air pollution, reduced greenhouse gas emissions, reduced economic losses from air pollution; improved property values and tax base; and improved health and productivity.