The green bond market review and 2018 outlook

The green bond market once again achieved an impressive result in 2017 with issuance rising by 61% Year-over-Year (YoY) to USD 156 bn

2018 is expected to be a year of consolidation with more modest growth of around 12%, reaching USD 175 billion and perhaps surpassing USD 210 billion (+ 35%).

Three regions account for over half of issuance. U.S. has the potential to retain its top spot in 2018 growing from USD 37.8 bn to USD 45 bn, followed by China (USD 30.7 bn) which could see growth once again to USD 34 bn. France came third with USD 19.4 bn. Germany leap-frogged to fourth place and has the potential to build further and grow by 50% in 2018 to USD 15 bn.

Issuance from government agencies jumped 57% YoY to USD 18.4 bn.

The main drivers of this activity and geographic dispersion can be attributed to sustained green infrastructure investment demand and green bond financing. This trend is a function of an extensive array of complementary enabling factors including economic, technological, security, policy, social and sector-specific forces, alongside persistently increasing appetite from institutional investors.

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