Green bond issuance surpasses $200 billion so far this year

Global green bond and loan issuance has surpassed $200 billion so far this year, putting the market on track to reach $230 billion to $250 billion by the end of the year, the Climate Bonds Initiative (CBI) said on Wednesday. Green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits. Although green bonds make up a small fraction of the overall bond market, they are attracting more attention because meeting emissions-cut targets will need trillions of dollars of capital from public and private sectors. Global issuance as of Oct. 22 stood at $202.2 billion, after a flurry of green bonds and loans from Singapore, Japan, Sweden and China, the CBI said.

It forecasts issuance for the full year will reach $230 billion to $250 billion and $350 billion to $400 billion next year. "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," said Sean Kidney, chief executive of CBI. "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," he said. Kidney added, however, that even $400 billion a year of green bond issuance is not enough to provide the $1 trillion a year of green investment which is thought to be necessary to enable the transition to a low-carbon economy.