Value of green bonds issued globally hit record of nearly $30bn in first quarter 2018

Wind Power Plant In Xinjiang
Record high for green bond issuances in first quarter 2018 (Source: Getty)

Global green bond issuances hit a record of just under $30bn (£21.42bn) in the first quarter (Q1) of 2018.

Analysis by law firm Linklaters has shown that Q1 of 2018 saw $29.64bn worth of green bonds issued globally, outstripping the previous high of $29.5bn in Q3 2017.

The value of issuances has increased by 9.4 per cent compared to the same quarter last year.

Green bonds are used to fund projects that have environmental or climate-related benefits.

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Linklaters capital markets lawyer Amrita Ahluwalia said: “We have seen a record amount of green bond issuance in the first quarter of this year which gives a sense of how things will pan out this year. Compared to other instruments, the green bond market is still relatively small but is growing quickly and there has been a significant increase in demand and interest from mainstream investors over the last two years as they look to diversify their investment portfolio.”

The UK accounted for just $95m of green bond issuances in Q1 2018 and $2.7bn of green bond issuances in 2017.

Linklaters energy lawyer Melanie Shanker said: “If you look purely at Q1 issuance levels, on paper, the UK looks less active than other markets. However, there are other encouraging signs of wider support for green finance in the UK.”

Shanker cited a recommendation from the UK green taskforce, a body set up by the government, for the UK to issue a sovereign green bond as part of a UK green capital raising plan.

Belgium was the leading jurisdiction for green bond issuances in Q1 with $5.5bn, followed by Indonesia with $3bn, China with $2.1bn and Canada with $1.98bn.

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Green bonds valued at $107.4bn were issued in 2017, a 64 per cent increase on the previous year.

China led the way with $17.8bn of issuances, followed by France with $16bn and the US with $10bn.

Ahluwalia said: “Some of the countries that top that table for issuances don’t come as a surprise, China, for example, has invested heavily in green finance, partly through the one belt one road initiative. However, we are seeing an increase in volume and range of borrowers from around the world, and evidence of tighter pricing in the green bond market now as a result of such demand.”

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