China cemented its position as a leading green bond market by issuing $55.8 billion in 2019, representing a 33% increase from $42 billion issued in 2018, according to a new report on Monday.
Climate Bonds Initiative, China Central Depository & Clearing Co. Ltd. Research Center with the support of HSBC launched the China Green Bond Market 2019 report analyzing the key developments of the green bond market.
"The tremendous potential for China to become the global engine room in the 2020s for green finance is reflected throughout this report. Increased off-shore issuance, harmonization and alignment are making the domestic market increasingly attractive to international investors," Sean Kidney, CEO of Climate Bonds Initiative, was quoted as saying in the report.
The continued rapid expansion will have a ripple effect, supporting transition and providing global momentum to policy, regulatory and financial sector measures to address climate resilience and adaptation, he said.
Global green bond issuance reached $259 billion last year marking a new record with a 52% increase compared to 2018.
Industrial and Commercial Bank of China was the largest Chinese issuer in 2019 with $5.3 billion.
Low-carbon transport was the largest theme for green bonds issued in 2019 followed by energy and water in China.
"By the end of 2019, the total outstanding amount of China’s domestic green bond market stood at $140 billion. A total of $124 billion worth of green bonds in China reach maturity in the next 5 years, representing 88% of the total outstanding," the report reads.
According to the report, the US and France followed China with approximately $51 and $30 billion issuance respectively. Germany ranked fourth with around $19 billion while the Netherlands followed with around $14 billion worth of green bonds last year.
The Netherlands Certified Sovereign Climate Bond with $6.7 billion from the Dutch State Treasury Agency ranked the largest single green bond deal of 2019, the report showed.
By Nuran Erkul Kaya