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

This policy paper argues that green securitisation is a critical tool for financing fragmented, small-scale low-carbon assets in Europe. It identifies that while institutional demand for green investments is high, supply is hindered by a lack of standardised contracts, insufficient asset volumes per lender, and low credit ratings for new technologies. The authors propose a public sector agenda including the creation of green asset definitions, the establishment of financial warehouses (potentially via the EIB), the provision of credit enhancements, and the use of cornerstone investments by development banks and the ECB to scale the market.

• The European Commission estimates that €200 billion of annual investment is required specifically for clean energy and energy efficiency investments.
• The OECD predicts that green asset-backed securities (ABS) in the EU could reach annual issuance of €19 billion by 2020 and €77 billion (representing 37% of green securities) by 2035 for renewable energy, energy efficiency, and private electric vehicles.
• Global issuance of labelled green ABS was approximately US$5 billion in 2016, having grown from almost zero in 2013; Europe had one issuance in 2016 valued at €526 million.
• Public sector actions to stimulate the green securitisation market include endorsing clear definitions for qualifying green assets to prevent 'greenwashing' and reduce due diligence costs for investors.
• The development of standardised loan contracts, such as power purchase agreements for solar installations, is necessary to lower transaction costs and facilitate the bundling of assets from different originators.
• Financial warehousing, potentially hosted by the European Investment Bank or as public-private partnerships, is recommended to aggregate small volumes of loans from various lenders into a size suitable for capital markets.
• Public credit enhancement, such as guarantees or investing in subordinated debt, is needed to help green ABS achieve the AAA/AA/BBB ratings required by institutional investors, as new asset classes often lack the historical credit data to achieve these ratings independently.
• The European Central Bank (ECB) could stimulate demand by including green securities and green ABS in its asset-purchasing programmes.
• Low-carbon investments are often perceived as higher risk due to technological uncertainty, production risks (e.g., insufficient wind for a wind farm), and policy risks, such as the retroactive removal of feed-in tariffs.

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} }