green bonds

Sustainability-linked debt financing is experiencing ever increasing popularity and the success of green bonds has driven other products linked to social performance and other sustainability criteria. The total volume of such investments to date passed the $2 trillion point this year.

According to the IEA’s World Energy Investment 2020 report, the Covid-19 pandemic has resulted in the largest ever drop in global energy spending, with investment expected to plunge in every major sector, from fossil fuels to renewables and efficiency. Felicia Jackson explores the future of solar and the impact green stimulus could have on the sector.

Green bonds have experienced rapid growth since their inception in 2007, and participants in the solar energy industry stand to benefit. In 2019, issuers launched over US$250 billion in green bonds offerings, representing 51% growth year over year.

Felicia Jackson explains why green finance is changing the energy world and is not just a dream for solar fans. Hailing from London, she is a financial expert, a co-founder of New Energy Finance, now Bloomberg NEF, a member of the UN working group that discusses methods for environmental goals, and a professor at the University of London. Jackson will also author a pv magazine white paper on the topic, scheduled to publish this summer.

Looking at the various solar power plant mechanisms brought by regulatory changes in 2020, the Turkish PV market is aiming to adopt some exciting new financial and business models.

The energy transition is becoming ever more apparent among power companies, as was evident at the European Utility Week event last week in Paris, which showcased the hopes and fears of energy companies. Rebranding next year to ‘Enlit’, the organizers aim to reach the whole energy industry.

In the past 12 years, green bonds have raised nearly $800 billion for investment in clean energy and other sustainability projects and companies are now pegging bond interest payments to their environmental performance.

The Italian energy company has committed to paying higher returns on today’s fundraising bond if it fails to ramp up its installed renewable energy generation capacity to 55% of its overall total by the end of 2021.

The Australian supermarket giant is issuing green bonds to fund the development of low-carbon supermarkets and the installation of solar at its stores and distribution centers.

World Bank sister organization the IFC has made a $75 million commitment to a green bond recently issued by Philippines based developer AC Energy. Vietnam’s sub-standard financial sector performance has prompted the Asian Development Bank to suggest green bonds could best leverage the country’s renewable energy targets.