(Bloomberg) -- A niche bond sale in Iceland may provide a template for other governments looking to promote their commitment to gender equality.

The island nation this week sold a €50 million ($53 million) gender bond, a kind of debt that funds projects to promote women’s empowerment. The sale was the first for a sovereign nation, with the innovation adding to a smorgasbord of ethical debt labels to appeal to investors with sustainable mandates.

“There is great interest for gender bonds at the moment and we have had conversations with a number of investors who would love to have the opportunity to buy,” said Myriam Zapata, director for sovereign ESG debt capital markets at BNP Paribas SA, which arranged the deal. “It’s a fantastic opportunity to highlight how advanced Iceland is, but also to show others how they can follow,” she said in an interview.

While Iceland’s deal was small and sold to Franklin Templeton in a private placement, other nations are likely to pay attention to its framework. The bond will fund affordable housing and help women in vulnerable positions. It will also reduce “the burden of unpaid care and domestic work,” for example by expanding state services that look after elderly relatives.

Iceland is following development banks and corporations who have raised gender-labeled bonds and loans linked to equality targets. Governments including South Africa, Pakistan and Indonesia have also floated the idea of selling such securities, but their plans have yet to materialize.

Chile sold a sustainability-linked bond last year that would increase the coupon paid to bondholders if it fails to increase the percentage of women on the boards of directors at relevant companies to 40% by 2031. Iceland’s financing framework also includes a proportion of women in managerial positions in its bond principles.

Iceland is the most gender-equal country in the world based on economic opportunities, educational attainment, health care outcomes and political leadership, according to the World Economic Forum. That said, last year saw women go on strike to call attention to remaining inequalities.

“Because we can do it and underline the situation of gender equality in Iceland, and being at the forefront of thinking on new ways of funding these issues we’re dealing with, that’s a good sign for other governments to follow our lead,” Sigurdur Ingi Johannsson, Iceland’s finance minister, said in an interview.

--With assistance from Olga Voitova.

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