Fact panel
| Investee: Social Bond | Investor: KBC |
|---|---|
| Sector: Education (social) | Range of Investment tickets: >€5 million |
| Type of organisation: Public organisations (schools, hospitals, care centers) | Sector: Education / health |
| Yearly turn-over: N/A | Type of investor: Banking |
| Type of investee: B | Type of investment: Listed debt-social bond |
| Country of investee: Belgium | Expected return (of the fund): Similar to market return (3%-4,375%) |
| Investment strategy: Sustainable investment | Specifics: Social bond based on ICMA principles |
| Ticket size of the investment: >€1 billion (€1,5 billion) | Some LPs: N/A |
| Year of investment: 2023-24 |
The what: Social Bond, a B-type investment
Problem addressed: Challenges in Belgium’s Education System
Belgium’s education system is broadly accessible and publicly funded, but persistent challenges limit its ability to deliver high-quality, equitable learning. Key issues include teacher shortages, deep-rooted educational inequalities, and the stigma around vocational training. A critical yet often overlooked problem is the poor condition of school infrastructure, particularly in urban and disadvantaged areas, where outdated facilities hinder learning and widen gaps. To build a more inclusive, future-ready system, strategic investments are needed to improve quality, modernize infrastructure, and bridge socioeconomic divides. Strategic financial interventions can play a key role in supporting this transition toward a more resilient and future-ready society.
Solution provided by KBC
KBC Group contributes to address these challenges by innovatively applying private sector financial instruments to the education sector, notably through Social Bonds. These bonds are structured according to the International Capital Market Association’s Social Bond Principles (SBP) and allow investors to channel capital into projects that generate measurable positive social outcomes. Within the Social Bonds, KBC supports in the education sector the construction, renovation, and modernization of school infrastructure, particularly benefiting schools that receive partial public funding and rely on additional financing to operate sustainably. Besides KBC is an important financier of care facilities and the healthcare sector.
The how: KBC, a Belgian bank
General presentation of KBC
KBC Group N.V. is a Belgian universal multi-channel bank-insurer, focusing on private clients and small and medium-sized enterprises in Belgium, Bulgaria, Czech Republic, Hungary, and Slovakia. It was created in 1998 and is one of Belgium’s major companies and the second largest bancassurer in the country.
In the beginning KBC engaged in sustainability in a more passive way. Over time, sustainability is gradually incorporated into the business and is now embedded as one of the four pillars of the corporate strategy and day-to-day operations. KBC supports the transition to a more sustainable and climate-proof society and is dedicated to increase its positive social impact through its core activities. More information on their journey can be found in their annual sustainability report.
Intentionality
KBC intentionally uses its social bond program to expand access to essential services like education, public infrastructure, and healthcare, aligning with SDG 4 (‘Quality Education’) and SDG 8 (‘Decent Work and Economic Growth’). By prioritizing quality education, KBC aims to reduce educational inequalities and support stronger career pathways.
Of the €1.5 billion raised, €500 million is allocated toward the education sector, with 95% invested in infrastructure across all Belgian provinces
Impact measurement and management
KBC ensures robust impact measurement and management of its social bond through continuous oversight by its Green and Social Bond Committee. This committee monitors compliance with the bond’s objectives and the KBC Group Sustainability Framework, and oversees the ongoing eligibility of selected assets. Each year, KBC publishes a comprehensive The Green and Social Bond Report, offering transparency through detailed quantitative metrics, including total proceeds allocated, allocations per project, and any unallocated amounts. To provide investors with meaningful insights, KBC tracks and reports output indicators for the funded projects, using where relevant the SBP’s Harmonized Framework for Impact Reporting for Social Bonds to guide its methodology. In line with their goal of expanding access to quality education, KBC reports on quantitative aspects such as the overall number of students and the amount financed per province, rather than on learning outcomes, which are the ultimate objective of educational systems.
Additionally, KBC commissions an independent third party to deliver an annual limited assurance report on the allocation of proceeds, starting one year after issuance and continuing until maturity. Both the allocation and reports are made publicly accessible through KBC’s Investor Relations webpage, reinforcing the group’s commitment to transparency, accountability, and measurable social contribution.
Additionality
Through its social bond program, KBC makes a deliberate financial contribution by directing substantial capital to the education sector. The Social Bond framework allows KBC the (re)financing of public school infrastructure, the provision of educational materials, and the development of sports and cultural facilities.
More information
- KBC
- KBC sustainability strategy
- KBC social bond
