Financing countries’ climate and sustainable development commitments will require global investment on an unprecedented scale. IFC estimates cumulative climate investment potential of $29.4 trillion across six key sectors in emerging market cities through 2030. These sectors include waste, renewable energy, public transportation, climate-smart water, electric vehicles, and green buildings1. Institutional investors, multinational corporations, and financial institutions are mainstreaming environmental concerns into their investment strategies and business activities. Debt capital markets are crucial sources of long term funding to help close financing gaps and mobilize capital for sustainable development.

Green bonds are fixed income instruments whose proceeds are earmarked exclusively for new and existing projects with environmental benefits focused on renewables, energy effciency, water, clean transport, and climate change mitigation and adaptation. Rapid growth of the global green bond market over the past decade to more than $700 billion in outstanding issues2 has required collaboration among multiple stakeholders, including first mover issuances by multilateral institutions, the mobilization of private and public sector issuers and investors, and numerous policy actions to provide and encourage regulatory frameworks, taxonomies, and enabling environments. Green bonds, although still representing a small fraction of the over $100 trillion of bonds outstanding globally3, represent a significant market opportunity for investors seeking to align their investment strategies with environmental considerations.

More broadly, impact investing aims to achieve both financial returns and measurable positive social or environmental impacts. In the 2019 IFC report, Creating Impact: The Promise of Impact Investing, IFC estimates investor appetite for impact investing is as high as $26 trillion, including $21 trillion in publicly traded stocks and bonds4. Changes in preferences of investors, particularly as more wealth transfers to younger generations, include a greater propensity to consider social and environmental factors alongside risk and return objectives. Asset managers are expanding ESG-tailored investment vehicles across product types and asset classes5.

Other debt instruments include sustainability bonds—the proceeds of which are used for a mix of environmental and social projects. Debut issuances of sustainability-linked and transition bonds have sparked much discussion among market stakeholders, with guidance on taxonomy and definitions forthcoming. For the time being, however, green bonds remain the predominant debt instrument and the focus of this report, recognizing that efforts to scale green bond markets will set the pace for green and sustainable financing more widely.

This second edition of the “Emerging Market Green Bonds Report” builds on joint work by IFC and Amundi to (a) address the gap in available public information on green bonds in emerging markets and (b) discuss in depth the issues unique to green bonds in emerging markets versus developed markets.

By providing a thorough analysis of the development of green bonds in emerging markets, this report highlights where there has been progress and where there is potential. Although there are still barriers to entry and numerous challenges to address, this report offers an outlook on the potential for market growth over the coming years that is based on the input of many experts in the space7 and on a qualitative assessment. An update on the mobilization efforts of policy makers as well as case studies on specific countries and regions provide additional context for the potential of specific markets.

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1. IFC (2018) Climate Investment Opportunities in Cities – An IFC Analysis. In the 2019 IFC report Green Buildings: A Finance and Policy Blueprint for Emerging Markets, IFC estimates that green buildings represent a $24.7 trillion investment opportunity across emerging market cities by 2030.
2. Based on data from Environmental Finance and Climate Bonds Initiative.
3. Based on data from Dealogic.
4. IFC (2019) Creating Impact: The Promise of Impact Investing, access at:

5. Morgan Stanley Institute for Sustainable Investing and Bloomberg (2019) Sustainable Signals: Growth and Opportunity in Asset Management, access at:



Global Head of Emerging Markets
Director, Global Macroeconomics, Market and Portfolio Research IFC