‘Surge’ in green sukuk issuance in H1 2019 – Climate Bonds Initiative

The first half of 2019 saw a “surge” in green sukuk issuance, said the Climate Bonds Initiative in a new study.

The increase in activity is thanks to Indonesia’s second sovereign green sukuk and debut deals from Malaysian Pasukhas Group and the UAE’s Majid Al Futtaim (MAF), said the study.

The new deals account for 56 per cent of cumulative sukuk issuance volume, it added.

Indonesia issued a $750 million green sukuk in the first quarter of this year after its $1.25 billion debut green sukuk in 2018, MAF’s $600 million sale was the first corporate green sukuk from the Middle East, and Pasukhas Group issued a 200 million ringgit paper.

“The three sukuk also contributed to emerging market (EM) issuance, which represented 19 per cent of H1 2019 volume,” said the London-based non-profit organisation.

“The majority of EM green bond issuance in the first half of 2019 came from China (44 per cent), followed by Poland (10 per cent), South Korea and Indonesia (9 per cent each) and Chile (7 per cent).”

A total of $117.8 billion in green bonds and sukuk were issued in the first half of 2019, up 48 per cent year-on-year, according to Climate Bonds Initiative.

$97.5 billion of these issuances, or 73 per cent, were listed. Euronext Amsterdam was the most popular green bond listing venue with $9.7 billion worth of deals in H1 2019.

The London Stock Exchange was the second most popular listing venue, followed by Euronext Paris.

Non-financial corporates dominated all H1 green bonds and sukuk with 26 per cent of issuance, up from 19 per cent from the same period last year.

Financial corporates came in second with a share of 19 per cent, down from 25 percent in H1 2018.

Sovereigns sold $18.4 billion in green paper, representing 15 per cent of total volume. This is up from 12 per cent in H1 2018.

Transport is the most common allocation for sovereign green bonds but funding has also been raised for other sectors, as well as for adaptation and resilience measures, said Climate Bonds Initiative.

HSBC emerged as the top green bond underwriter globally and in emerging markets for the first six months of 2019.

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