Sun shines on green bond market with India, China making debut

At a time when climate change issues are pushing investors towards clean projects, green bond volumes this year are expected to more than double globally from last year’s $37 billion. This year, and India, also made a debut in this niche fund raising segment.

 

India’s and successfully issued green bonds, while China’s debut green bond issuance came from Xinjiang Goldwind Science & Technology Co Ltd, a Chinese energy solutions provider, early August.

 

According to Henry Shilling, senior vice president, Environment Social & Governance, Moody’s Investors Service, the vast majority of so far have been sold by issuers in Europe and the US, where government environmental policies and the associated need to finance projects supporting greenhouse gas emissions (GHG) reduction targets are more advanced than in developing countries.

 

“However, some of these countries are starting to make the transition towards more environmentally sustainable economies, which could offer good opportunities for future green bond growth. We expect to see an increasing range of issuer credit profiles, maturities, currencies and bond features as the market grows,” Shilling added.

 

Shilling points out to a Chinese central bank report released in April that estimates the “green sectors” in that country will invest an equivalent of 3% of GDP (RMB2 trillion or $323 billion) annually in the next five years.

 

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