Green Bond Deals Exceed Record $100 Billion in 2017

Global green bond deals are expected to top the $100 billion mark on Thursday and hit a new record, putting them on track to reach $130 billion by the end of the year, data from the Climate Bonds Initiative showed.

Issuance is calculated to be $101.4 billion, after a $1.5 billion green bond from the China Development Bank settles on Thursday, according to CBI, a London-based non-profit that certifies the green credentials of bonds, Reuters reported.

Green bonds are a growing category of fixed-income securities, which 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.

In 2016, global green bond issuance was nearly worth $82 billion. Last month, Moody’s Investor Service said issuance is on track to exceed $120 billion this year.

The increase this year has been fueled by a number of significant deals, especially from China, the CBI report said, which was released to Reuters on the sidelines of a UN climate conference in Germany.

China was the biggest issuer at over $16 billion in the year to date; followed by France, the United States, Germany, the Netherlands, Sweden, Mexico, Spain, India and Canada, the report said.

Green bonds issuance by countries, known as sovereign bonds, is also growing, with France becoming the second country to issue one after Poland last year.

Fiji has also become the first emerging economy to issue a sovereign green bond and Nigeria is expected to be the first African country to issue one in the coming weeks.

“A systemic response from global finance is required. Asset owners and managers need to adjust their capital allocations,” said Christiana Figueres, former UN climate chief and convenor of Mission 2020.

“Banks and corporates need to commence large-scale green bond programs. Funding clean energy and green infrastructure to meet NDC goals is the objective. $1 trillion in green finance by 2020 is the performance measure,” she added.

Earlier this year, Figueres and other climate leaders called for a tenfold increase in green bond investment from 2016 levels and set a target for 2020 of $1 trillion.