Global rating agency, Moody's Investors Service in its latest report has said that the issuance of green bonds worldwide is expected to shoot up by 60 percent to $250 billion in the year 2018 as against $155 billion of green bonds issued in previous year. Besides, it pointed out that developed market banks and corporates will remain the most active participants in the market, with emerging market issuers, sovereigns and municipals, and green secularisations providing important engines of growth.
The rating agency observed that India and China will be the leaders among emerging markets. It also said that growth in aggregate issuance will be supported mainly by China and India, which have accounted for a combined $53 billion of issuance since the inception of the green bond market. It noted that issuances will increase in other emerging countries as governments look to implement green finance policies. Further, it believes that multilateral agencies will also play a pivotal role in supporting the development of emerging market green bonds. As per the Moody’s findings, the cumulative green bond issuance in India has more than doubled to $6.5 billion (in US dollar-equivalent terms) since the Securities and Exchange Board of India (SEBI) issued its green bond regulations in May 2017.
Similarly, the report indicated that such issuances by China rose exponentially to $22.9 billion in 2016, from $1.3 billion a year earlier, following the release of green bond guidelines from the People’s Bank of China and the National Development and Reform Commission. It observed that despite a number of challenges the green bond market for emerging regions are strong, underpinned by ambitious climate and sustainable policy agendas and multilateral support for market development. It also noted that the bulk of the issuance across the globe, in terms of volume, will be driven by issuers who have traditionally played a large role in the green bond market.