US green bonds near record high
US green bond sales are close to historic peaks, driven by corporate, government, and municipal issuers.
US issuers are helping green bond sales approach previous records even under evolving policy priorities. At the start of November, sales reached $550 billion. The prior annual record is $588 billion, set in 2021.
Corporate, government and municipal green bond issuance climbed 13.5% so far this year.
The California Community Choice Financing Authority has issued $6 billion in 2024, with a significant uptick in the past 12 weeks, cementing its place as the 10th biggest green bond issuer—larger than either the governments of China or Canada.
Atlanta’s aviation department is also garnering attention, lowering borrowing costs through "greenium" practices—selling debt labeled as environmentally friendly compared to unlabeled debt.
Last month, Atlanta also announced plans to sell $383.5 million in sustainable bonds for water systems. Elsewhere, wind and solar projects are expected to increase regardless of local and state political leaning as green bonds and environmental funds increase.
BloombergNEF estimates that new solar, wind and storage installations in the US will increase to more than 1.1 terawatts by 2035, triple the previous decade and potentially avoiding past political barriers. The US is currently on track to grow annual clean energy installation by 25% this year.
BNEF policy associate Derrick Flakoll says the clean power incentives in the Inflation Reduction Act (IRA) will likely be too beneficial to the economy to scrap completely, and potential aggressive policy changes may only cut energy estimates by up to 20%.
“It’s a good thing,” Enphase Energy Inc. CEO Badri Kothandaraman told Bloomberg concerning IRA incentives. “It’s creating jobs and it’s bringing back manufacturing.”
US sustainability-linked loans have increased this year with JPMorgan and Bank of America each managing more than $20 billion in deals, including refinancing. JPMorgan says its clients are more confident designing structures that can avoid accusations of greenwashing levied in years past.
Sustainable debt issuance in the US saw increases during the current and prior administrations, slowed when the Fed raised rates and is currently recovering during easing. It hit $194 billion in 3Q 2024, ahead of supranational at $51 billion and China at $37 billion.
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