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Proceeds from green bonds are typically used on
projects to cut greenhouse gas emissions, adapt to climate
change, increase energy efficiency or expand the use of
renewable energy.
The bonds are mainly issued by development banks and corporates
such as utilities and real estate companies.
The green bond market as a whole has been growing, with issuance
tripling in last year to $36.6 billion. Corporate issuance
accounted for around $19 billion.
This year, the corporate market has been boosted by more
issuances, including Danish wind turbine manufacturer Vestas' <VWS.CO>
seven-year 500 million euro ($544 million) bond earlier this
month and French recycling company Peprec's 480 million euro
bond.
"We expect green bond issuance to remain relatively buoyant
given investor appetite for green products as well as issuers
taking advantage of the exceptional demand," S&P said in a
statement.
"The surge in green bond sales represents growing demand among
investors for green investments amid concerns about climate
change," it added.
However, commonly agreed standards on what constitutes a green
bond and transparency over how proceeds are used will be needed
to make the market become more mainstream.
The corporate green bond market could experience substantial
growth in China this year, as the Chinese government tackles
pollution and could encourage companies to raise funds by bond
issuance to help diversify credit risk in the banking system,
S&P said.
Declining oil prices should not hinder growth in the green bond
market as price movements will have less impact on renewables
than many fear due to climate change being a long-term driver
for investments, S&P added.
($1 = 0.9199 euros)
(Editing by Mark Potter)
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