After surpassing the $100 billion mark in November, the green bond market is set to double again this year, according to estimates by Standard and Poor’s (S & P). The rating agency predicts that green bonds will reach $200 billion in 2018, compared to $155 billion in 2017. A 30% increase over one year, which still reflects stagnation in market growth. Over the past five years, it has grown 80% per year on average.
But now, green bonds are being extended to new issuers. "We have seen strong growth in private issuers: companies, banks, and, more recently, designers of structured green financial products," the rating agency explained. Development banks, for example, which accounted for 60% of the volume issued five years ago, now account for only 11%.
The United States wants to take the lead in green bond issuance
S & P assures that emerging markets, led by China, India and Mexico, are likely to maintain their involvement in the market. The Middle East's green bond share could also increase, though it was Europe which, once again, represented the primary region in issuance volumes last year. But the United States is set to catch up with the continent. "The American green bond market has more than doubled in 2017, driven by states, municipalities and businesses, despite the 'volatility' of climate policies at the federal level," S & P said.
As for sovereign green bonds, behind Poland, France, Fiji and Nigeria, stands Belgium, Morocco and Sweden — all countries that could follow suit with future sales in the coming months.
Green bonds are real tools against climate change because they finance projects in the field of renewable energy, sustainable transport networks, energy efficiency, and building construction, with minimal environmental impact.
Concepcion Alvarez @conce1