Clean energy in Canada backed by CAD 19.5bn of green bonds

Dec 9, 2014 - The energy sector accounts for CAD 19.5 billion (USD 17bn/EUR 13.8bn) or 69% of all climate-themed bonds issued to date in Canada, supporting mainly hydropower but also solar and wind projects.

In a joint report published Monday, the Climate Bonds Initiative (CBI) and think tank/do tank Sustainable Prosperity (SP) said that the Canadian climate bonds universe amounts to CAD 28 billion outstanding. Most of these bonds have not been labelled as "green" or "climate" bonds by the issuers.

In the energy sector specifically, nearly all of the climate bonds are unlabelled ones issued by Canadian utility Hydro-Quebec. The power distribution and generation company sources most of its electricity from hydropower plants (HPPs). The remainder of the estimated CAD 19.5 billion in energy bonds have been issued to back solar and wind projects and smaller renewable energy and hydro corporates.

The CBI and SP pointed out that bonds labelled as “green” or “climate” are no longer a niche market pioneered by a handful of multilateral development banks, as was the case only three years ago. This segment of the bond market has expanded rapidly in 2014, both in Canada and globally, and it keeps growing.

The Bonds and Climate Change report estimates that the full climate-themed bonds market globally, whether labelled or not, stands at CAD 574 billion. Canada's share is 5%.

(CAD 1 = USD 0.871/EUR 0.706)

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