The green bond market has hit an all-time high this year, with a record level of issuances surpassing the $200 billion milestone. These are the findings of the Climate Bonds Initiative, which reported that the US leads the rankings in 2019 for the most issuances, followed by France, China, Germany, Netherlands and Sweden.
However, overall supranational rankings falls between the Netherlands and Sweden as nine nations have issued sovereign green bonds this year.
Total issuance of the sovereign bonds was $25.8 billion, representing 13% of issuance year-to-date. France, Belgium, Poland, Ireland and Indonesia are among the repeat sovereign issuers.
The five largest green bonds and loans issued so far this year have been from Dutch State Treasury Agency issuing €5.99 billion ($6.66 billion), KfW at $3.36 billion, Industrial Bank at $2.91 billion, the Republic of France with €2.47 billion ($2.77 billion) and the Noor Energy 1 at $2.69 billion.
Overall, energy is the dominant use of the proceeds, with one third of finance going towards it, while 29% is used on low-carbon buildings, 20% on low-carbon transport, 9% on water, and waste and land use each account for 3%.
The global figure for all green bond and loan issuance for the year so far stands at $202.2 billion and is projected to hit between $230-250 billion by year-end, according to the Climate Bond Initiative.
Looking ahead, the initiative forecasts global annual green bond issuances to hit between $350-400 billion for 2020. Commenting on the rise in issuances, Sean Kidney CEO and co-founder of the Climate Bonds Initiative said:
“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. But $200 billion or $400 billion 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. 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 Citywire Selector