Emerging Market Green Bonds

June 7, 2022

The market for green bonds issued in emerging markets and developing economies rebounded strongly in 2021, propelled by demand from both domestic and international investors and by expanded issuance by new and existing issuers. The volume of issuance more than doubled to a record US$95 billion from US$41 billion in 2020. In all, 35 emerging markets and developing economies (EMDEs) issued green bonds in 2021, including seven new entrants. Alongside this strong interest in green bonds, which are earmarked for environmental projects, 2021 also saw momentum for other types of bonds linked to social and sustainability investments in these countries. The interest in such financial instruments highlights their growing role as a significant source of funding for many emerging markets.

EMDEs need considerable investment to meet development goals and transition to low-carbon economies. Maintaining the growth momentum achieved in 2021 could be challenging, in the face of a changing economic and geopolitical context, with existing inflation pressures and supply chain disruptions exacerbated by war in Ukraine. Nonetheless, the report sees the potential for issuance in EMDE green bonds to rise to US$150 billion by 2023, with Chinese issuers contributing the largest share.

The fourth edition of IFC and Amundi’s Emerging Market Green Bonds Report provides a detailed update of developments in green bonds issued in EMDEs and the outlook for the coming year. For the first time, it includes a focus on social, sustainability, and sustainability-linked bonds issued in these countries. The report also looks at the need for EMDEs to scale up investments in climate adaptation and discusses global policy initiatives, including those announced at the 26th United Nations Climate Change Conference of the Parties. A final section looks at the “greening” of debt restructuring, which allows countries whose debt is unsustainable to direct capital toward green and sustainable investment.


Key Highlights for 2021

  • There was a total of US$95 billion emerging market green bond issuances in 2021
  • This is a 58 percent increase in emerging market ex-China green bond issuances from 2020
  • Through 2021, there has been a cumulative issuance of US$323 billion in emerging market green bonds
  • US$64 billion emerging market social, sustainability, and sustainability-linked bond issuances in 2021
  • 50 emerging markets have issued green bonds since 2012
  • US$150billion projected annual emerging market green bond issuance by 2023
  • 7 emerging markets with debut green offerings in 2021
  • 77 basis points outperformance of emerging market green bonds