The green bond market saw incredible growth last year, reaching $36.6 billion (£24bn) issued by 73 different issuers, according to figures released by the Climate Bonds Initiative. The figure for 2014 is more than triple the number recorded in 2013.
The growth takes the total amount of green bonds outstanding to $53.2 billion (£35bn) by the end of 2014. Explaining what has caused the rapid growth, the organisation states, “In 2014 corporate and municipal bond issuers joined the ‘green party’ while development banks continued to be the backbone of the green bond issuance.”
The big development banks still account for the majority of issuance of total green bonds last year, accounting for 44%, or $16 billion (£10.5bn). The majority of new entrants to the market were also national development banks that had been “waiting in the wings for the right moment to issue a green bond”, including Germany’s KfW, France’s AFD and the Netherlands’ NWB Bank.
The European Investment Bank was the overall top green bond issuer for the year, with bonds amounting to $5.6 billion. KfW, GDF Suez, the World Bank and Toyota followed this, making up the top five.
Climate Bonds Initiative added, “In addition to new issuers, we saw a diversification in product types with the World Bank issuing a series of retail investor focused green bonds, as well as green bonds across six different currencies.”
The growth in the green bond market last year outperformed forecasts. Investment Bank HSBC predicted that green bond issuance would double in 2014 to a global record of $25 billion (£16.4bn).
Looking ahead to this year, Climate Bond Initiative has already forecast strong growth, with the market expected to reach $100 billion (£65.7bn).
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