The economic fallout caused by COVID-19 has greatly affected EMs, which will experience widely divergent recovery paths. Recovery measures could create significant opportunities for green and sustainability-related projects by prioritizing large-scale public investment in green sectors and encouraging private sector investment through supportive policies. Incorporating green objectives to EM recovery efforts is necessary not only to mitigate climate risks and environmental challenges but ultimately also to increase resilience to future shocks.
The third edition of IFC and Amundi’s Emerging Market Green Bonds Report provides an overview of EM green bond developments in 2020, discusses policy and regulatory changes driving EM green bond issuance, and provides an outlook for potential for green bond market growth. EM green bond issuance outside of China was resilient in 2020, increasing by 21 percent from 2019, to $22 billion.
Given the highly supportive market fundamentals for the EM green bond market, EM green bond issuance is expected to double in the next three years compared to the previous three and the market is expected to cross the $100 billion mark of annual issuance by 2023.
