Green Bonds Reach Record High

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Written By: Jeremy Feakins

Sales of green bonds reached a record high in 2014, which could result in a surge of renewables, reports the head of Bloomberg New Energy Finance.

investment 2The renewable-energy industry is starting to reap the benefits of a decade of investment. In particular, renewable-energy prices have become competitive with conventional sources, even without the help of subsidies.

Michael Liebreich, Chief Executive officer of Bloomberg New Energy Finance, says that resurgence in spending on solar power and onshore wind could drive investment to around US$300 billion (€218 billion) in 2014. Last year, environmental green bonds reached a record high of $14 billion (€10.2 billion), largely driven by banks, Morgan Stanley, SEB, JP Morgan and Credit Agricole. In 2014 it is estimated that green bond investment may reach $20 billion (€15 billion).

Meanwhile, the European Investment Bank (EIB) also reached a record high in green bonds. At the start of 2014, the EIB’s Climate Awareness Bond (CAB) peaked to record $2.7 billion (€2 billion), making it the largest green bond outstanding in the world.

“This confirms that climate awareness in the capital markets is growing and that larger CABs are the right product at the right time”, says Eila Kreivi, director and head of the EIB’s capital markets department. “EIB is committed to an ongoing dialogue with socially responsible investors and to accomplishing actual demand via timely supply.”

Also gaining momentum within its green bonds is the Nordic Investment Bank (NIB). Last week, the NIB issued a five-year, $55 million (€40 million) floating rate note as part of its ongoing Environmental Bond program to promote environmentally friendly products and services.

Overall, in 2013, around $346 billion (€252 billion) of climate bonds were issued. Leading the way was China, which accounted for $127 billion of these. The United Kingdom and France followed, with $50 billion (€36 billion) and $41 billion (€30 billion), respectively.