Record US$30b in green bonds seen this year: S&P

London

COMPANIES could issue a record US$30 billion in so-called "green bonds" this year, but further growth in the market will depend on developments in China and common standards, Standard & Poor's Rating Services said on Monday.

Proceeds from green bonds are typically used on projects to cut greenhouse gas emissions, adapt to climate change, increase energy efficiency or expand the use of renewable energy. The bonds are mainly issued by development banks and corporates such as utilities and real estate companies.

The green bond market as a whole has been growing, with issuance tripling last year to US$36.6 billion. Corporate issuance accounted for around US$19 billion.

This year, the corporate market has been boosted by more issuances, including Danish wind turbine manufacturer Vestas' seven-year 500 million euro (S$748 million) bond earlier this month and French recycling company Peprec's 480 million euro bond. The corporate green bond market could experience substantial growth in China this year, as the Chinese government tackles pollution and could encourage companies to raise funds by bond issuance to help diversify credit risk in the banking system, S&P said. REUTERS