Green does not suit everyone
For anyone hoping that the green bond market can grow to even greater heights, news that Belgium and Nigeria are bringing debut deals — and that other sovereigns are considering the possibility — will be welcome. But it may be that some countries are better suited to the model than others.
Privately, some Debt Management Office heads point to the heavy levels of oversight and planning required to make sure that proceeds are going to the right places, and that any environmental benefits arising from the cash influx are duly reported, as obstacles to entering.
Others — even those that have sold green bonds or are planning to — admit there are large levels of communication required between different government ministries that had previously little to do with each other.
That might mean countries with a federal system — or at least a decentralised one — will find the work required to ensure the necessary oversight is in place becomes too onerous.
It is hard enough getting different departments in central government to agree — never mind when you’re dealing with that in another dimension by following cash as it makes its way down to regional levels and then bringing the impact measurements back up to the top.
This may become a moot point though. The green bond market could develop so that different models are available to suit the particular needs or constraints of different governments.
But for the moment, green bond aficionados should be rubbing their hands with glee — and not being too harsh on those sovereign issuers that are sticking to their current suite of debt products.