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Green Funding tops USD255mn for 2019 – but Beyond China, EMs Still a Small Slice of the Pie

Certified green funding volumes – including both bonds and loans – came in at USD254.9bn for 2019, according to new research from the Climate Bonds Initiative, a 50% rise on 2018 volumes. But outside China, emerging markets still see fairly low issuance of green or sustainability-linked instruments.

Green finance is picking up globally - but still nascent in emerging markets

Jan 20, 2020 // 3:30AM

CBI data showed the largest international green bond market was the EU, with USD106.7bn of annual issuance – led by KFW (USD9.02bn), the Dutch State Treasury Agency (USD6.66bn), and the Republic of France (USD 6.57bn). The United States topped national rankings with USD50.6bn, led by Fannie Mae – which issued USD22.8bn in green securities.

Notably, China saw roughly USD30.1bn of issuance aligned with international definitions and reporting rules, mostly coming from financials. Total Chinese green issuance as defined under domestic regulation, however, was far larger – clocking in at a whopping USD53bn equivalent.

Germany, Netherlands, Sweden, Japan, Italy, Canada and Spain occupied the remaining Top 10 national spots.

Collectively, the EU, US and China accounted for nearly three quarters of the 2019 global total.

The results came in at the top end of the CBI’s 2019 estimates, with the association eyeing between USD350bn and USD400bn in volumes for 2020. The association hopes to help mobilise up to USD1tn in annual green investment by 2021-2022.

Beyond China, however, emerging market jurisdictions didn’t occupy a significant share of overall issuance. Some of the more notable transactions of 2019 included the Republic of Indonesia’s second dual green and conventional sukuk and Chile’s debut green issuance and liability management exercise, Access Bank’s NGN15bn green bond, Cofide’s PEN150mn green notes, Majid Al Futtaim’s green sukuk issuances, ACWA Power’s Noor Energy 1 green loan, and a trio of green deals from the Russia, CIS & Eastern Europe – Resursosberezhenie KhMAO, Russian Railways, and DTEK.

According to the CBI, clean energy dominated overall Use of Proceeds at 31.5%, followed by low carbon buildings at 29.3%, low carbon transport 20.2%, water 9.3%, with land use and waste both at 3.5%, and other categories comprising the remainder.

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Bonds & Loans
January / March 2020

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