The World Bank this week launched a $225m bond to support reforestation in the Amazon region, with investor returns linked for the first time to the success of carbon-removal projects in the rainforest.

It's the biggest so-called 'outcome bond' that the bank has issued so far and investors will see a fixed guaranteed return as well as a variable component linked to the generation of carbon removal units.

The bank called the bond "a new model for mobilising private capital to support reforestation finance" as, unlike previous transactions, it's not linked to the sale of carbon credits from avoided emissions.

Some of the capital raised will be used to fund the reforestation activities of Mombak, a Brazil-based company that enters into partnerships with landowners in the rainforest to reforest the land with native tree species.

"As demonstrated by the historic level of participation in today's transaction, private investors are eager to connect their financial return to positive development outcomes in the Amazon region," said Jorge Familiar, vice president and treasurer of the bank.

"We believe the bond's unique structure will prove to be both a strong investment and a catalyst for further innovation in the sustainable fixed-income market," said Hadiza Djataou, vice president at Mackenzie Investments, one of the early investors in the bond.

The World Bank's outcome bonds allow investors to support specific development projects and outcomes, and are focused on projects that work towards meeting the UN's sustainable development goals.

The UN's High-Level Expert Group on Climate Finance two years ago called for a new roadmap on global climate finance, with an estimated $1trn a year needed in external finance by 2030 for emerging markets and developing countries other than China.