US Green Bond Sales Near Record High, Reaching $550B: BloombergNEF Report
- Surge in Issuance: Green bond sales in the US have hit $550 billion by November, approaching the record of $588 billion set in 2021.
- Notable Contributors: The California Community Choice Financing Authority issued $6 billion this year, positioning it as the 10th largest issuer globally, surpassing even China and Canada.
- Policy and Growth Outlook: BloombergNEF projects US clean energy capacity to triple by 2035, supported by strong incentives from the Inflation Reduction Act (IRA).
US issuers are propelling green bond sales toward record levels despite shifting policy landscapes. As of early November, green bond sales reached $550 billion, nearing the annual record of $588 billion set in 2021. This rise represents a 13.5% year-over-year increase in corporate, government, and municipal issuance.
The California Community Choice Financing Authority stands out with $6 billion issued in 2024, boosted notably in recent months. This places the Authority among the top global issuers, ahead of China and Canada.
Atlanta’s aviation department is leveraging “greenium” strategies to reduce borrowing costs by marketing debt as environmentally friendly. The city plans to issue $383.5 million in sustainable bonds for water systems, further showcasing its commitment to sustainability.
Related Article: RBC Real Estate Fund Hits $5B Mark, Boosted by $250M Green Bond
Energy and Policy Outlook: BloombergNEF foresees US solar, wind, and storage installations surpassing 1.1 terawatts by 2035, tripling the past decade’s figures and potentially bypassing political hurdles. Annual clean energy installations are projected to grow by 25% this year.
Derrick Flakoll, a BNEF policy associate, noted that “the clean power incentives in the Inflation Reduction Act (IRA) will likely be too beneficial to the economy to scrap completely,” even if policies shift. He added that drastic changes would only reduce energy estimates by up to 20%.
Enphase Energy Inc. CEO Badri Kothandaraman highlighted the IRA’s positive impact: “It’s a good thing. It’s creating jobs and it’s bringing back manufacturing.”
Sustainable Finance Trends:
US sustainability-linked loans have also risen, with JPMorgan and Bank of America managing over $20 billion in deals each, including refinancings. According to JPMorgan, clients are increasingly confident in structuring deals that avoid greenwashing accusations.
Despite periods of slowed growth due to Federal Reserve rate hikes, sustainable debt issuance in the US reached $194 billion in the third quarter of 2024, surpassing supranational issuers and China.
This momentum underscores the resilience of the US sustainable finance market amid evolving policy and economic conditions.
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