Green bonds could triple to $100bn in 2015

The global green bonds market reached US$37 billion last year, according to a new report released on Wednesday, and it could nearly triple to $100 billion in 2015.

The market for green bonds, sold to finance environmental investments, is growing rapidly as developing countries and emerging economies including China and India becoming involved.

Moody’s Investors Service report said India’s first green bond was sold in April by Yes Bank and will support low-carbon power projects.

Yes Bank raised Rs10bn (£103 million) through its 10-year green infrastructure bonds and the Export-Import Bank of India raised $500 million in a dollar bond issue in March.

The report highlights China’s plan to open its debt capital markets and reduce pollution which could transform the country’s green bonds market if suitable regulations accompany the plan.

Citing estimates from the Climate Bonds Initiative, the report says the global green bonds market could hit $100 billion this year with China’s proposed involvement giving the market a significant boost.

The Narendra Modi government in India has made renewable energy generation a top priority on its energy agenda and is aiming to use green bonds to help finance its plan to quadruple its clean energy production.

India requires approximately $200 billion to achieve its target of installing 100 gigawatts of solar power and 60,000MW of wind power by 2022.

The report said, “So far, the vast majority of green bonds 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 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.”