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Tribune News Network
Doha
As many countries turn to debt to help fund their recoveries from the coronavirus pandemic, an increasing number of governments and companies are looking at sustainability-focused financial instruments to fund major projects, Oxford Business Group (OBG) has said in its latest report.
According to data compiled by industry analysts, some $200 billion in green bonds were issued globally in the first nine months of the year, which is a 12 percent increase on 2019. While figures lagged behind 2019 levels for much of the year, 2020’s issuances look set to eclipse last year’s record-breaking result following a surge in the third quarter.
Significant developments took place in Germany, which issued its inaugural sovereign green bond in September, valued at €6.5 billion and plans to launch a second later in November, taking its total to €10.5 billion.
Elsewhere in Europe, Sweden and Hungary also launched their first ever green bonds this year.
In terms of emerging markets, in June the Indonesian government issued a $2.5 billion green sukuk (Islamic bond), its third venture into the sustainable debt market.
Corporate entities within emerging markets have also turned to green bonds to fund new developments.
In September, Qatar National bank became the first company to issue a green bond in the Qatar, raising $600 million.
Meanwhile, building on its government’s use of sovereign green bonds, in October Indonesian power company Star Energy Geothermal sold the country’s first green corporate bond with an investment-grade rating, raising $1.1 billion.
Although the economic fallout of COVID-19 has affected overall energy investment this year, the development of renewable energy projects has remained remarkably consistent when compared to the hydrocarbons industry.
The ‘World Energy Outlook 2020’ report released by Paris-based International Energy Agency (IEA) in October, predicts that global energy investment will fall by 18.3 percent this year, with total energy demand dropping by 5.3 percent.
While the report forecasts that investment in oil, coal and gas will fall by 8.5 percent, 6.7 percent and 3.3 percent, respectively, investment in renewable projects is projected to increase by 0.9 percent.
“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022,” said Fatih Birol, executive director of the IEA.
As OBG has detailed, emerging markets have been among those shaping this trend towards renewable energy following the outbreak of COVID-19.
“From a policy perspective, every government should try to promote green energy more aggressively. Covid-19 has cleared a path for clean energy by changing lifestyles,” Bundit Sapianchai, president and CEO of Thai renewable energy company BCPG, told OBG in an interview in June.
“From an investment perspective, in March 2020 share prices of companies across the energy industry fell by more than 50 percent from their pre-COVID-19 prices. There is a strong consensus that green energy is the future emerging segment for the industry,” he added. “Thus, this is an opportunity for green funds and green investors to buy shares at a cheaper price.”
Doha
As many countries turn to debt to help fund their recoveries from the coronavirus pandemic, an increasing number of governments and companies are looking at sustainability-focused financial instruments to fund major projects, Oxford Business Group (OBG) has said in its latest report.
According to data compiled by industry analysts, some $200 billion in green bonds were issued globally in the first nine months of the year, which is a 12 percent increase on 2019. While figures lagged behind 2019 levels for much of the year, 2020’s issuances look set to eclipse last year’s record-breaking result following a surge in the third quarter.
Significant developments took place in Germany, which issued its inaugural sovereign green bond in September, valued at €6.5 billion and plans to launch a second later in November, taking its total to €10.5 billion.
Elsewhere in Europe, Sweden and Hungary also launched their first ever green bonds this year.
In terms of emerging markets, in June the Indonesian government issued a $2.5 billion green sukuk (Islamic bond), its third venture into the sustainable debt market.
Corporate entities within emerging markets have also turned to green bonds to fund new developments.
In September, Qatar National bank became the first company to issue a green bond in the Qatar, raising $600 million.
Meanwhile, building on its government’s use of sovereign green bonds, in October Indonesian power company Star Energy Geothermal sold the country’s first green corporate bond with an investment-grade rating, raising $1.1 billion.
Although the economic fallout of COVID-19 has affected overall energy investment this year, the development of renewable energy projects has remained remarkably consistent when compared to the hydrocarbons industry.
The ‘World Energy Outlook 2020’ report released by Paris-based International Energy Agency (IEA) in October, predicts that global energy investment will fall by 18.3 percent this year, with total energy demand dropping by 5.3 percent.
While the report forecasts that investment in oil, coal and gas will fall by 8.5 percent, 6.7 percent and 3.3 percent, respectively, investment in renewable projects is projected to increase by 0.9 percent.
“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022,” said Fatih Birol, executive director of the IEA.
As OBG has detailed, emerging markets have been among those shaping this trend towards renewable energy following the outbreak of COVID-19.
“From a policy perspective, every government should try to promote green energy more aggressively. Covid-19 has cleared a path for clean energy by changing lifestyles,” Bundit Sapianchai, president and CEO of Thai renewable energy company BCPG, told OBG in an interview in June.
“From an investment perspective, in March 2020 share prices of companies across the energy industry fell by more than 50 percent from their pre-COVID-19 prices. There is a strong consensus that green energy is the future emerging segment for the industry,” he added. “Thus, this is an opportunity for green funds and green investors to buy shares at a cheaper price.”
