Stimulating private market development in green securitisation in Europe: the public sector agenda

The document argues that green securitisation—aggregating small-scale low-carbon assets into tradable securities—can unlock significant institutional capital for the energy transition in Europe. It identifies barriers such as a lack of standardised contracts, limited asset volumes per lender, and low credit ratings for new asset classes. To overcome these, the authors propose a public sector agenda including the creation of green asset guidelines, the development of standardised loan contracts, the establishment of financial warehouses, and the provision of credit enhancements and cornerstone investments by development banks and the European Central Bank.

• European Union infrastructure investment needs for clean energy and energy efficiency alone are estimated at €200 billion annually, but traditional finance channels are insufficient due to financial constraints on banks, utilities, and governments following the 2008 crisis.
• The OECD predicts that green asset-backed securities (ABS) could reach €77 billion in annual issuance in the EU by 2035 for renewable energy, energy efficiency, and private electric vehicles.
• A primary barrier to green securitisation in Europe is the lack of harmonic, EU-level standards to define 'green' assets, which increases transaction costs for investors and risks 'greenwashing'.
• New asset classes like solar PV and energy efficiency loans often suffer from low credit ratings due to a lack of historical performance data and limited asset pools, making them less attractive to institutional investors who typically seek A-ratings or above.
• The public sector can support the market by developing standardised loan contracts and power purchase agreements, which reduces the cost of bundling assets and evaluating risk.
• To address the problem of limited loan volumes within individual lenders, the authors recommend establishing Europe-wide or national financial warehouses to aggregate standardised green loans.
• Public credit enhancements, such as guarantees for junior tranches or investing in subordinated debt, are necessary to make the senior tranches of green ABS attractive to private institutional investors.
• The European Central Bank (ECB) and development banks like the EIB could stimulate demand by providing cornerstone investments or including green ABS in asset-purchasing programmes.
• Green ABS face specific systemic risks, particularly 'policy risk', where the removal or adjustment of feed-in tariffs or subsidies could negatively impact the entire asset pool.

APA

Kidney, S., Giuliani, D., & Sonerud, B. (2017). Stimulating private market development in green securitisation in Europe: the public sector agenda. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/GreenSecuritization-EU_policy-paper_20_04_17-FINAL.pdf

Chicago

Kidney, Sean, Diletta Giuliani, and Beate Sonerud. Stimulating private market development in green securitisation in Europe: the public sector agenda. Climate Bonds Initiative, 2017. https://www.climatebonds.net/files/documents/publications/GreenSecuritization-EU_policy-paper_20_04_17-FINAL.pdf.

Wikipedia

{{cite report |last1=Kidney |first1=Sean |last2=Giuliani |first2=Diletta |last3=Sonerud |first3=Beate |title=Stimulating private market development in green securitisation in Europe: the public sector agenda |publisher=Climate Bonds Initiative |date=April 2017 |url=https://www.climatebonds.net/files/documents/publications/GreenSecuritization-EU_policy-paper_20_04_17-FINAL.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kidney2017stimulating, author = {Kidney, Sean and Giuliani, Diletta and Sonerud, Beate}, title = {{Stimulating private market development in green securitisation in Europe: the public sector agenda}}, institution = {Climate Bonds Initiative}, year = {2017}, month = apr, url = {https://www.climatebonds.net/files/documents/publications/GreenSecuritization-EU_policy-paper_20_04_17-FINAL.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }