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Monday, January 25, 2021, 14:04
Global green bond issuance hit new record high last year
By Reuters
Monday, January 25, 2021, 14:04 By Reuters

An employee walks through the solar panels of a photovoltaic power plant installed by Generale du Soleil and operated by Energ'iV SEML in a former landfill of waste, on Dec 8, 2020 in Guignen, western France. (PHOTO / AFP)

LONDON - Global green bond issuance reached a record high of US$269.5 billion by the end of last year and could reach US$400-US$450 billion this year, a report by the Climate Bonds Initiative (CBI) showed on Monday.

Green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport.

Although issuance reached a new record in 2020, the figure was just above 2019’s total of US$266.5 billion as issuance slowed in the second quarter due to the effects of the coronavirus crisis before rebounding in the third quarter.

“The impact of COVID-19 in 2020 proved a huge economic and social negative. In that context, the resilience of green finance markets led to a record year of issuance,” reads the report.

“2021 may enable a sustained resurgence,” the CBI added.

Green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport

ALSO READ: HK's green bond market remains robust

The CBI is a London-based non-profit which promotes investment in the low-carbon economy.

Supporting factors for green bond issuance this year include US President Joe Biden’s intention to return the country to the international Paris Agreement to fight climate change and investors and policymakers’ growing focus on decarbonising industrial sectors.

The green bond market started up in 2007.

READ MORE: China ups the stakes in green bond push

Although they make up a small fraction of the overall debt market, green bonds are attracting attention because the need to meet emissions-reduction targets will need trillions of dollars of capital from public and private sectors.

Last year, the United States issued the most green bonds, with a total value of US$51.1 billion, followed by Germany at US$40.2 billion and France at US$32.1 billion, the report said.

The proceeds of green bonds were mainly aimed at energy sector investments, followed by low-carbon buildings and low-carbon transport, it added.


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