Green Securitisation: unlocking finance for small-scale low carbon projects

This briefing paper by the Climate Bonds Initiative explains how green securitisation—the process of pooling illiquid low-carbon assets into tradable securities—can unlock finance for small-scale climate projects. It highlights the growth of the green Asset-Backed Securities (ABS) market, identifies suitable asset classes, and provides policy recommendations for the public sector to scale these markets.

• The market for green Asset-Backed Securities (ABS) grew from USD 1.9 billion in 2014 to approximately USD 5 billion in 2016, representing a 6% market share of green securities issued that year.
• The OECD projects that annual issuance of green ABS for low-emission vehicles, energy efficiency, and renewable energy could reach between USD 280 billion and 380 billion by 2035, excluding additional potential from waste, land-use, adaptation, and low carbon public transport.
• Green securitisation benefits small-scale projects by aggregating loans to reach a size suitable for bond markets and potentially lowering the cost of capital compared to bank financing, which is critical for projects with high capital expenditure.
• Suitable asset classes for green securitisation include existing categories such as electric vehicle car loans, green building mortgages, and loans to green SMEs, as well as new classes like loans for battery and storage projects, energy efficiency upgrades, and leases from wind and solar assets.
• The public sector can scale green securitisation through several policy actions: developing consistent 'green' definitions, providing financial support for data collection and loan contract standardisation, offering guarantees for junior and mezzanine tranches, supporting financial warehousing via public-private partnerships, and investing directly in green ABS.

APA

Climate Bonds Initiative (2017). Green Securitisation: unlocking finance for small-scale low carbon projects. https://www.climatebonds.net/files/drupal-files/files/March17_CBI_Briefing_Green_Securisation.pdf

Chicago

Climate Bonds Initiative. Green Securitisation: unlocking finance for small-scale low carbon projects. 2017. https://www.climatebonds.net/files/drupal-files/files/March17_CBI_Briefing_Green_Securisation.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Green Securitisation: unlocking finance for small-scale low carbon projects |date=February 2017 |url=https://www.climatebonds.net/files/drupal-files/files/March17_CBI_Briefing_Green_Securisation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2017green, author = {{Climate Bonds Initiative}}, title = {{Green Securitisation: unlocking finance for small-scale low carbon projects}}, institution = {Climate Bonds Initiative}, year = {2017}, month = feb, url = {https://www.climatebonds.net/files/drupal-files/files/March17_CBI_Briefing_Green_Securisation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }