“We need to see people cracking open this market like IFC did in 2013,” declared Sean Kidney, CEO of the Climate Bonds Initiative (CBI). He was referring to IFC’s issuance of two $1 billion green bonds as he set the scene for announcing CBI’s 'Green Bond Development Bank of 2018' award to IFC at a ceremony on March 5, 2019. IFC was recognized for its trailblazing work as issuer, investor and technical advisor. IFC was also recognized for its partnership with Amundi in creating the Amundi Planet Emerging Green One Fund. This is focused on green bonds in emerging markets and is the largest green bond fund in the world.
Green Bonds Market
Albert Einstein once said: “The only source of knowledge is experience.” For years I have wondered about this. Surely you can understand something without actually having done it. After all, mankind’s understanding of the vast universe is greater than what can be directly experienced, and some of it is derived from theoretical reasoning. I was on my way to the 2018 Africa Carbon Forum to share fiscal policy lessons under the CAPE program and the debate was still raging in my head when I arrived at the UN campus in Nairobi Kenya.
A few years ago, this would have seemed a strange question, as debt management and climate policy have traditionally been regarded as unrelated fields. But at a workshop at the annual Debt Management Forum in Vienna on May 22, 2017, debt managers from 50 developing countries discussed the role of emerging debt instruments such as green bonds and blue bonds, in raising capital for climate-friendly projects that range from reforestation to renewable energy.
While green and blue bonds resemble more traditional debt instruments in terms of structure and returns, they represent a novel approach to climate finance. Created just ten years ago, the total value of green bonds has grown at a spectacular pace, reaching US$82.6 billion in 2016. By the end of 2017, the total value of green bonds will likely exceed US$100 billion.