SAO PAULO, June 13 (Reuters) - The World Bank will issue a new bond expected to raise some $200 million to support reforestation efforts in Brazil's Amazon rainforest, it said on Thursday, choosing banking giant HSBC to structure the transaction.

The principal-protected bond will provide financing for reforestation initiatives selected by Brazilian startup Mombak, which buys degraded land from farmers and ranchers or partners with them to replant native species in the world's largest rainforest.

Mombak's business model generates CO2 removal credits that can be sold in carbon markets. A portion of the bonds' targeted return will be linked to the value of credits generated by the projects, the international lender said.

"This transaction is a continuation of this market we're trying to develop," World Bank Vice President Jorge Familiar told Reuters, referring to the so-called "outcome bond" model the bank launched earlier this decade.

Such bonds, according to the lender, allow investors to support specific sustainable projects and their outcomes. They harness private capital and transfer project performance risk to investors, who are rewarded if the activities are successful.

Similar initiatives by the World Bank include a $100 million bond to finance plastic-reduction projects in Ghana and Indonesia and a $150 million bond to support efforts to increase the endangered black rhino population in South Africa.

Mombak, which is backed by investors such as Bain Capital and AXA and has sold carbon credits to firms like McLaren and Microsoft, hopes the move will be a game changer for the nascent carbon removal industry in Brazil.

Seen as risky by many investors, the sector has faced a hard time getting loans to reduce the cost of capital and finance operations, which are expensive as firms need to buy land and plant trees, Mombak co-founder Peter Fernandez said.

"You need a lot of money to do reforestation; and because it's so new, the cost of capital is quite high," he noted, adding the transaction might help unlock debt markets for others in the industry.

Critics of carbon offset markets, including Greenpeace, say they allow emitters to continue to release greenhouse gases.

Separately, the World Bank's IFC arm and the Inter-American Development Bank's IDB Invest arm said 22 new banks and other types of finance firms, including Citi and Visa, had joined the Amazonia Finance Network that the two development banks launched late last year. It takes the total to 46. (Reporting by Gabriel Araujo Editing by Christina Fincher)