Vientiane: The green bond market in Laos is in a nascent stage, but both institutional investors and underwriters show strong interest in the market, especially sustainable agricultural and renewable energy, according to a joint report of the Asian Development Bank (ADB) and Global Green Growth Institute.
The report on the Green Bond Market Survey for the Lao People’s Democratic Republic finds that almost 60% of institutional investors surveyed indicated they are keen to explore green bond investment opportunities, but they lack the capacity and resources to do so.
Similarly, about 80% of local underwriters said they have clients interested in issuing green bonds, but they require additional assistance and guidelines to launch new products.
Additional capacity building support from regulators and development partners is cited as necessary to grow a sustainable green bond market in Laos, alongside development of the corporate bond market.
"While the Lao PDR’s bond market is in an early stage of development, it is encouraging that many capital market participants are interested in green finance," said ADB Country Director for Laos Sonomi Tanaka in a press release on Tuesday.
"ADB will continue to collaborate closely with the Lao PDR’s regulatory bodies to strengthen the development of the country’s sustainable finance market, especially for green bonds," Tanaka added.
According to the report, local investors prioritize the company profile of issuers when deciding to invest in green bonds.
And while investors are looking to get higher returns, it was reported that the majority of underwriters consider attracting new investors to be the primary reason for issuers to issue green bonds.
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