The GFOA Committee on Governmental Debt Management has recently updated GFOA White Paper: Green Bonds. The paper helps issuers understand the general characteristics, costs, risks, and benefits of entering into these types of transactions. It also provides considerations for issuers contemplating the use of green bonds, such as project eligibility, use of proceeds, securing an independent opinion affirming the “green” qualifications of such projects, reporting obligations, and pricing.
Since 2014, global issuance of green bonds has increased from $37 billion in par amount to $135 billion at the end of 2017. Green bond issuance by U.S. state and local governments has also increased during the same time period, but it still represents less than 10% of the total global issuance amount. Market growth is expected to continue as investors look for environmentally focused investment opportunities and issuers look toward projects that share the same sensibilities.