Green bond issuance has generated significant recent attention as this market continues to expand. In 2014, there were 35 issuers of green bonds worldwide, totaling $36.6 billion in par amount, which is more than three times the 2013 volume of $10 billion. In the first quarter of calendar 2015, the global volume reported by the World Bank was $8 million. Green bond issuance by U.S. state and local governments represents less than 10% of these amounts. While green bond issuance has remained flat so far in calendar 2015, market growth is expected to continue as investors look for environmentally focused investment opportunities and issuers look toward projects that share the same sensibilities.
This GFOA Committee on Governmental Debt Management released a whitepaper on green bonds as a primer and to help issuers understand the general characteristics, costs, risks, and benefits of entering into a such transactions. The paper 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.