Nordic investment bank SEB predicts global energy crunch will see renewables investment breach $400bn mark in 2022

Global investment in renewables is set to increase by 25 per cent in 2022 as governments and corporates ramp up investments in clean energy in response to the global energy supply crisis, analysts have predicted.

In its latest sustainable finance report, Nordic corporate bank SEB predicts global investments in clean energy could reach nearly $400bn in 2022 against a backdrop where the global energy supply crunch has sent revenues soaring for power generators.

It said the increase in renewables investment would be driven by both governments spending more on energy infrastructure and corporates looking to invest in decentralised clean energy supplies that would enable them to shield themselves from rocketing gas prices. 

“After a decade in which clean energy investment was capped at $300bn, we expect a jump to close to $400bn as governments start to spend more on infrastructure,” said Thomas Thygesen, head of research of SEB’s climate and sustainable finance division. “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-centralised renewable energy supplies.”

The report, published late last month, also provides an outlook for the sustainable finance market, predicting it will also grow significantly during 2022. It forecasts that global issuance of sustainable debt is set to grow from $1.55tr in 2021 to between $2.3tr and $2.6tr this year, driven largely through the issuance of green bonds.

SEB’s report forecasts that global issuance of green bonds could increase 50 per cent year-on-year to more than $900bn under its baseline scenario, rising to a 70 per cent increase to just over $1tr in its optimistic ‘green growth’ scenario.

“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,” said Gregor Vulturius, advisor at climate and sustainable finance at SEB. “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 per cent.”

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