* 2015 issuance reached record $42.4 bln
* Paris agreement has sparked more interest in green bonds
By Nina Chestney
LONDON, Feb 2 The global agreement reached at
the climate summit in Paris could prompt the amount of bonds
this year issued to finance low-carbon projects to exceed $50
billion, Moody's Investor Service said on Tuesday.
This would follow a record $42.4 billion issuance in 2015.
The proceeds from so-called green bonds help finance
projects such as renewable energy, the energy efficiency sector,
green transport and wastewater treatment.
In the fourth quarter of last year, the issuance of green
bonds reached $15.2 billion, the strongest quarterly volume of
the year, boosted by activity by financial institutions ahead of
talks in Paris in December to secure a global climate agreement.
This helped raise last year's total issuance to its highest
ever level since the market began in 2007, a report by Moody's
Investor Service said.
The global climate summit in Paris late last year agreed a
landmark deal, committing both rich and poor nations to rein in
rising emissions blamed for global warming.
Following the agreement, Moody's expects green bonds to
attract more attention because meeting emissions-cut targets
will need trillions of dollars of capital from the public and
"We expect the momentum from the UN Conference on Climate
Change, as well as the signing of the Paris Agreement scheduled
this April, to likely motivate additional and repeat issuance of
green bonds," Henry Shilling, a Moody's senior vice president
said in a statement.
"In this favourable environment, even after more recent bond
market headwinds and assuming a resumption of the growth rates
seen in 2012-14, issuance could exceed $50 billion by a
significant margin," he added.
The green bond market is still a tiny part of the overall
bond market. Although green bonds are no different from other
bonds, they must finance environmentally sound projects, but
there are differing views across the world on what that means.
Commonly agreed standards on what constitutes a green bond
and transparency over how proceeds are used are needed to make
the market become more mainstream.
London's financial market launched a push last month to
encourage pension and insurance funds to invest in green bonds,
with a focus on creating a framework for the sector.
(Editing by Jeremy Gaunt.)