March 30, 2017 / 8:47 AM / a year ago

Green bond issuance could hit $125-150 billion this year-SEB

LONDON, March 30 (Reuters) - Global green bond issuance could reach $125-150 billion this year as demand for low-carbon infrastructure investment continues, Swedish banking group SEB said on Thursday.

SEB said $97 billion of green bonds were issued last year.

The proceeds from so-called bonds help finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.

In January, HSBC forecast the growth in green bond issuance could slow this year to $90-120 billion after a record 2016.

“At the conclusion of the first quarter, SEB maintains its 2017 year-end green bond market potential issuance figures at $125 billion in a baseline scenario, with upside potential for issuance to rise to $150 billion,” SEB said in a report.

In the first quarter of this year, green bond issuance was $25.7 billion, 67 percent higher than in the fist quarter last year, SEB said in the report.

“Chinese issuance grew rapidly in 2H16 and significant volume may still lie in the months ahead, with announcements from Chinese authorities signalling that green bond issuance in 2017 potential is ‘strong’,” the report said.

New initiatives aimed at attracting foreign investment into the Chinese domestic green bond market, have also been announced.

SEB said this was propelling issuance even though U.S. President Donald Trump signed an order this week to undo Obama-era climate change regulations, keeping a campaign promise to support the coal industry and calling into question U.S. support for the international deal to fight global warming.

Editing by Susan Thomas

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