Green Bonds

What is a Green Bond?

A green bond, like any other bond, is a fixed-income financial instrument for raising capital through the debt capital market.

The key difference between a ‘green’ bond and a regular bond is that the issuer publicly states it is raising capital to fund ‘green’ projects, assets or business activities with an environmental benefit. Bonds can also be used to fund projects with a social or community benefit such as
improving healthcare or social services, and these are typically known as ‘social’ or ‘social impact’ bonds.

Green Bonds aimed at funding environmentally friendly investments. Projects financed by green bonds range from wind farms, solar and
hydropower plants, to rail transport as well as improving insulation in buildings. Only a small portion of these bonds have actually been labelled as green or climate bonds by their issuers.

The Market

In 2017, total issuance of Green Bonds has reached to $155,5 billion, with a huge 78% growth on 2016, which translates into 1'500 new issuance from 37 different countries around the globe with 239 different issuers which includes 146 newcomers!

Issuers

Early issuers were such development banks as the World Bank, EBRD and EIB which launched the first bond in 2007. But recently more
corporations and municipalities have signed on, and that’s what’s fueled the recent growth. Among largest issuers of 2017; Republic of France via its initial January 2017 for EUR7bn (USD7.6bn), China Development Bank (USD4.6bn), European Investment Bank - EIB (USD4.6bn) and sub-sovereign New York MTA (USD4.2bn) are the forth runners.

Green Bond issuance forecast for 2018 is around $250-300 billion which means 60% growth on 2017 figures.

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