Green Bonds Guide for City Policymakers in Developing Countries

This guide by the Climate Policy Initiative provides strategic advice for cities in developing countries to access green bond markets to fund low-carbon, climate-resilient infrastructure. It highlights the significant gap in capital market access for these cities and outlines both direct and indirect pathways to secure financing based on a city's creditworthiness.

• Cities in developing countries face severe limitations in accessing capital markets to fund climate plans. As of November 2016, fewer than 20% of these cities can access local capital markets, and only 4% are considered creditworthy enough for international markets.
• The global green bond market experienced rapid growth between 2012 and 2016, with annual issuance increasing 13-fold from USD 3.2 billion in 2012 to USD 44 billion in 2015, and a projection of USD 75 billion by the end of 2016.
• City-based projects in developing countries are significantly underrepresented in the green bond market. They account for USD 2.3 billion, which represents 1.7% of total green bond market flows since 2007, 6% of all flows to developing countries, and 11% of all city-based project flows globally.
• Creditworthiness is the primary barrier to direct bond issuance for cities in developing countries. Consequently, most funding is obtained indirectly; 94% of finance for these projects comes from green bonds issued by development finance institutions (DFIs) like the World Bank and Asian Development Bank. As of November 2016, Johannesburg, South Africa, had issued the only municipal green bond from a developing country city, valued at USD 137 million.
• Cities can pursue two main strategies to access green bond finance: direct issuance, which may require enhancing creditworthiness through guarantees or cornerstone buyers, or indirect access by aligning investment plans with the criteria of other issuers such as commercial banks, private corporations, or multilateral DFIs.

APA

Climate Policy Initiative (2016). Green Bonds Guide for City Policymakers in Developing Countries. https://www.climatepolicyinitiative.org/publication/green-bonds-guide-city-policymakers-developing-countries/

Chicago

Climate Policy Initiative. Green Bonds Guide for City Policymakers in Developing Countries. 2016. https://www.climatepolicyinitiative.org/publication/green-bonds-guide-city-policymakers-developing-countries/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Green Bonds Guide for City Policymakers in Developing Countries |date=13 December 2016 |url=https://www.climatepolicyinitiative.org/publication/green-bonds-guide-city-policymakers-developing-countries/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2016green, author = {{Climate Policy Initiative}}, title = {{Green Bonds Guide for City Policymakers in Developing Countries}}, institution = {Climate Policy Initiative}, year = {2016}, month = dec, url = {https://www.climatepolicyinitiative.org/publication/green-bonds-guide-city-policymakers-developing-countries/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }