Green bonds

This fact sheet describes green bonds as fixed-income instruments earmarked for environmental projects, highlighting that energy and buildings receive the largest share of recent allocations (~30% each). It details the roles of institutional investors and MDBs—such as the World Bank and EIB—and outlines the technical requirements, costs (including a typical greenium of 2–5 bps), and timelines for issuing these instruments.

• Green bonds are fixed-income instruments where proceeds are dedicated to projects providing climate or environmental benefits. While they maintain the same credit terms as conventional bonds, issuers are required to report on the environmental impact of the funds used.
• Recent allocations for green bonds are distributed across several sectors: energy and buildings each account for approximately 30%, transport for approximately 20%, and water and wastewater for between 5% and 10%. Adaptation and nature-based systems, such as watershed management and coastal protection, are increasingly included through sovereign frameworks.
• Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) are significant providers of green bonds. The World Bank has cumulative issuances exceeding USD 200bn, the EIB over USD 60bn, the AfDB over USD 10bn, and the ADB issues approximately USD 5bn annually.

APA

Climate Policy Initiative (2025). Green bonds. https://www.climatepolicyinitiative.org/toolkit-instrument/green-bonds-3/

Chicago

Climate Policy Initiative. Green bonds. 2025. https://www.climatepolicyinitiative.org/toolkit-instrument/green-bonds-3/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Green bonds |date=21 October 2025 |url=https://www.climatepolicyinitiative.org/toolkit-instrument/green-bonds-3/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025green, author = {{Climate Policy Initiative}}, title = {{Green bonds}}, institution = {Climate Policy Initiative}, year = {2025}, month = oct, url = {https://www.climatepolicyinitiative.org/toolkit-instrument/green-bonds-3/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }