Antinuclear

Green bonds fast gaining popularity

Green bonds the new black in the market as environmental financing surges, ABC News, 26 July 16 By business reporter Stephen Letts The environmentally sensitive shoots developing in the global bonds market appear to be heading for a serious growth spurt with another record quarter of “green bonds” issuance.

In a research note on the sector, the credit ratings agency Moody’s found environmentally focused green bond issuance in the June quarter hit a record $US20.3 billion ($27 billion), well above the $US16.9 billion ($22.5 billion) recorded in the first quarter of the year.

Added together, the two quarters raised almost 90 per cent more capital than in the first half of 2015.

“The global green bond market is now poised to reach $US75 billion ($100 billion) in total volume for 2016 and so set a new record for the fifth consecutive year, given the strong issuance already observable in the first two weeks of Q3,” Moody’s senior vice president Henry Shilling said.

That fresh flow in the third quarter includes $300 million worth of bonds from Victoria put out to tender earlier this month, the first green issuance from an Australian state or federal government……

Clean energy projects dominate the market

The increasing demand has been supported by many big pension funds now carrying mandates that stipulate portfolios must hold required levels of environmentally friendly investments.

Around two-thirds of green bond proceeds in the quarter were directed to renewable energy and energy efficient projects, with clean transport accounting for a further 17 per cent of the money raised.

The US dominated issuance, with 23 per cent of the market, followed by the big development agencies such as the World Bank, with 17 per cent, although China is expected to bounce back to its dominant position in the market with $US3 billion worth of bonds in the pipeline for sale in coming months……. http://www.abc.net.au/news/2016-07-27/green-is-new-black-in-the-bonds-market-environmental-finance/7664414

July 27, 2016 - Posted by Christina Macpherson | business, energy, Victoria