LONDON, May 5 (Reuters) - Moody’s said on Tuesday it had lowered its estimate for green bond issuance this year to $175 billion to $225 billion, down from its previous forecast of $300 billion, due to the economic effects of the coronavirus pandemic.
Green bonds are fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport.
The bonds make up a small fraction of the overall bond market, but they are attracting attention because meeting emissions-cutting targets will need trillions of dollars of capital from public and private sectors.
Green bond volumes fell by 49% in the first quarter of this year to $33.9 billion from the last quarter of 2019, Moody’s said.
A separate report by HSBC said last week that green bond issuance is down 9% so far this year compared with the first four months of 2019, but it expects this to be temporary.
Moody’s said it maintained its $100 billion forecast for social and sustainability bonds, given an increased market focus on coronavirus response efforts.
“Greater emphasis on social finance and sustainable development will likely be one of the lasting outcomes of the coronavirus crisis,” said Matthew Kuchtyak, analyst at Moody’s. (Reporting by Nina Chestney, editing by Larry King)