India, China to Lead the Emerging Nations’ Green Bonds Market in 2018
India, February, 08 2018 -
Cumulative green bond issuance in India has more than doubled to $6.5 billion since the market regulator Securities and Exchange Board of India (SEBI) issued its green bond regulations in May 2017.
India and China are set to emerge as the leaders in the green bonds market among the emerging nations in 2018, according to Moody's Investors Service. Global green bond issuance will achieve record heights in 2018 with total issuance set to eclipse $250 billion, up over 60 per cent in 2017.
Green bonds are issued for funding of specific projects which have positive environmental and climate benefits. "The growth in aggregate issuance will be supported primarily by China and India, which have accounted for a combined $53 billion of issuance since the inception of the green bind market, as well as other emerging markets with governments implementing green finance policies," the US-based agency has said in its latest report on Green Bonds.
Cumulative green bond issuance in India has more than doubled to $6.5 billion since the market regulator Securities and Exchange Board of India (SEBI) issued its green bond regulations in May 2017. Chinese issuance have also risen exponentially to $22.9 billion in 2016, from $1.3 billion a year earlier, following the release of green bond guidelines from the People's Bank of China and the National Development and Reform Commission (NDRC).
The report also said that the governments in the emerging markets are also providing greater policy visibility and regulatory certainty in accordance with commitments outlined in the Paris climate agreement which will anchor both issuer and investor interest in green bonds. "By way of example, India plans to grow its renewable energy capacity to 175 Gw by 2022 from 57 GW currently using both public and private sector finance," Moody's said.
Moody's also said that while a vast majority of green binds have been issued in in US Dollars or Euros, it expects a gradual diversification in terms of issuing currencies as new players enter the market.