Green Bond Issuance Tops $200bn
Progressive green bond and loan issuance for 2019 has just passed USD200bn, marking an all-time high for the green market and setting the stage for annual issuance post December to meet Climate Bonds Initiative forecast range for the year of between $230-250bn.
Green bond issuance tops $200bn milestone. New global record in #greenfinance.
Latest @ClimateBonds data shows $202.2bn at 22 Oct.
$1trillion annual investment by 2021/22 is now the big target says CEO @seankidney. https://t.co/Jdp2KhixX1 #greenbonds #greenloans pic.twitter.com/eTvTfUTolX
— Climate Bonds (@ClimateBonds) October 24, 2019
Climate Bonds analysis sets the global figure at USD202.2bn as at 22/10/19. Green bonds closing from Terna Energy*, EUR150m (USD167m), (the first green bond issued from Greece), and a mix of green bonds and loans from Singapore, Japan, Sweden and China, were among the deals pushing the total past the USD200bn mark. Progressive issuance for 2019 reached USD100bn in late June.
The USA leads national rankings to date in 2019 followed by France, China, Germany, Netherlands, Sweden, Spain, Japan, Italy and Canada. Supranationals rank between Netherlands and Sweden.
The five largest green bonds/loans issued in 2019 so far are from Dutch State Treasury Agency* EUR5.99bn (USD6.66bn), KfW EUR3bn (USD 3.36bn), Industrial Bank Co., Ltd. CNY20.0bn (USD2.91bn), Republic of France EUR2.47bn (USD2.77bn) and the Noor Energy 1(ACWA Power, Silk Road Fund)* USD2.69bn green loan, funding single largest Concentrated Solar Power (CSP) site in the world.
Energy dominates overall Use of Proceeds at 33%, followed by low carbon buildings on 29%, low carbon transport 20%, water 9%, with waste and land use each at 3%.
Nine nations have issued sovereign green bonds in 2019 at USD25.8b (approx. 13%) of total issuance for the year to date. France, Belgium, Poland, Ireland, Indonesia, Chile and Nigeria are now repeat sovereign issuers.
Climate Bonds Certified bonds/loans for the year is almost a fifth of the market, at approx 19% (USD37.5bn) of volume via issuers demonstrating international market best practice.
Climate Bonds Initiative forecasts USD350-400bn in global annual green bond/loan issuance for CY2020.
Sean Kidney, CEO, Climate Bonds Initiative:
“Based on these figures, 2019 will be another record year for green finance. New sovereigns are entering the market and pioneers like France, Poland and Nigeria are now repeat green issuers. Bond size and diversity of issuers is increasing, and noteworthy is the presence of leading European and Chinese banks amongst the largest issuers. All positive signs of market maturation.”
“But $200bn or $400bn a year is not enough to address the climate emergency and provide the capital at the scale urgently required for large scale transition, adaptation and resilience.”
“From here on, every year in the 2020s must be a record year for green finance. The climate challenge for global finance – regulators, banks, insurers and institutional investors – remains. Generating that first $1 trillion in annual green investment by 2021/22 is now critical. It’s the benchmark from which to measure year on year growth in climate based investment towards 2030.”
Source: Climate Bond Initiative
MTS BondsPro volume from emerging markets more than doubled from 2018 to 2019.
The Eurobond market is attracting more investors in Asia with a need for diversification and liquidity.
Demand for emerging market green bonds should increase over time as the market deepens.
Social bond volume was a record in the first quarter.
EM volume rose to a record in the first quarter.