Green Bonds Issuance Estimated At $70 Billion This Year
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2016 is expected to be yet another blockbuster year for the global green bonds market.
Moody’s estimates that the cumulative issuance of labelled green bonds will hit $70 billion this year. After taking a lead in the global renewable energy market, China is also likely to dominate the green bonds market, which is expected to drive the total issuance to an all-time high.
The labelled green bonds market already had its best quarter ever in Q1 2016 when $16.9 billion worth of bonds were issued. China had an overwhelming share in this issuance. With $7.9 billion raised, China overtook the United States as the largest player in the green bonds market.
Moody’s had projected a total issuance of $50 billion in 2015 while the actual issuance was just over $42 billion.
A report of Moody’s from last year had suggested that the new wave of green bonds issuances would be led by emerging markets like China and India.
Several Chinese banks have been directed to issue green bonds to raise cheaper funds to finance clean energy and energy efficiency infrastructure. The Chinese central bank announced a quota system for banks and financial institutions to float green bonds and raise up to 300 billion Yuan (over US$45 billion).
Similarly, in India, several public and private sector companies are planning to raise funds through green bonds to fund the highly ambitious renewable energy capacity addition programs.
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