A new report by SEB predicts a rise of 25 per cent in renewable energy investment to close to USD 400 billion in 2022.
The Green Bond report, released by financial services group SEB, provides outlooks for renewable energy investment and the sustainable debt market next year.
The transition outlook monitors the current energy crisis in Europe and Asia and assesses how this will affect renewable energy investments in the future.
With the surge in cost of energy and electric power, making energy production extremely profitable, it is expected the crisis will pave the way for a break with the flatling trend of the past decade.
Thomas Thygesen, Head of Research, Climate & Sustainable Finance, at SEB, said: “After a decade in which clean energy investment was capped at USD 300 billion, we expect a jump to close to USD 400 billion in 2022 as governments start to spend more on infrastructure,”
“We see upside to that estimate as companies faced with sky-high energy bills may see the possibility to offset that cost by engaging in now extremely profitable investments in de-centralized renewable energy supplies.”
In sustainable financing, global transactions are predicted to reach a total of between USD 2.3 trillion and USD 2.6 trillion next year, driven mainly by strong growth in green bond issuance.
Gregor Vulturius, Advisor at Climate & Sustainable Finance at SEB, said: ”While we don’t expect another doubling of the market like we saw in 2021, we are still very confident that the exponential growth of sustainable finance is set to continue in 2022,”
”In particular, we forecast that sustainable-themed bonds will continue to grow strongly next year, with new issuance of green, social, sustainability and sustainability-linked bonds increasing by between 35 and 53 percent.”
The Green Bond Report states the overall growth in sustainable financing in 2022 will mainly be driven by the issuance of green bonds, which is seen increasing 50 percent year-on-year to more than USD 900 billion in the Baseline Scenario and by 70 percent to just over USD 1 trillion in the Green Growth Scenario.