Global green bond market grows rapidly

Ten years after their introduction, the issuing of so-called green bonds grows at a remarkable pace, Germany’s state-owned KfW development bank writes in a research paper. Between 2015 and 2016, global releases of the bonds, whose issuers are obliged to reinvest their proceeds in “green” projects like renewable energy or water quality improvement, have more than doubled from 32 billion to 68 billion euros, the KfW says. While green bonds used to be mainly distributed by supranational actors such as the World Bank, these issuers became a minority for the first time in 2016 and were replaced by commercial banks. In terms of the bonds’ national provenance, China boosted its releases from under one billion euros in 2015 to over 27 billion euros the following year, making it the country with the most new releases by far. By contrast, Germany’s releases in 2016 stood at around 4 billion euros, the KfW writes. But despite the bonds’ rapid growth “it remains a niche market”, the development bank says. The environmentally friendly bonds accounted for 1.4 percent of all bonds released in 2016.

Find the research paper in German here.