According to an estimate from Moody’s Investors Services, the global green bonds market will hit a record of $70 billion this year.
The green bonds market, which drives investments in clean energy and environmentally friendly projects, had its best quarter ever in Q1 of 2016 with $16.9 billion worth of bonds being issued.
China is forecast to dominate the green bonds market, which is expected to drive the total issuance to an all-time high. China accounted for $7.9 billion of the total, overtaking the United States as the largest player in the green bonds market.
Moody’s projects a total issuance of $50 billion in 2015 with the final total issuance being recorded as approximately $42 billion.
In light of this, several banks in China have been instructed to issue green bonds to raise cheaper funds to finance clean energy and energy efficiency projects.
Consequently, the Chinese central bank has announced a quota system for banks and financial institutions to float green bonds and raise up to 300 billion Yuan (US$45 billion).