This chapter’s scenario analysis highlights the critical role that debt markets will play in financing the climate transition and underscores the impracticality of overreliance on either the public or private sector alone. While a narrow focus on investment needs for the transition fails to capture the full complexity of the challenge, scenario analysis offers a pragmatic approach to assessing the financial requirements of transitioning to a net-zero economy. It also allows the consideration of key variables such as the growth of climate mitigation investments, international climate finance for developing countries and foreign direct investment.
Global Debt Report 2025
Financing Growth in a Challenging Debt Market Environment
Abstract
This chapter examines the financing needs for transitioning to a low-carbon economy, focusing on corporate bonds. Its primary objective is to identify the necessary developments in corporate bond markets to enable energy sector companies to undertake the investments required for the climate transition. While the analysis spans the global economy, it places an emphasis on the role of capital markets in mobilising finance for the climate transition in emerging market and developing economies (EMDEs).
In 2024, global clean energy investment reached USD 2 trillion, yet transitioning to a low-carbon economy while meeting rising energy demand requires over USD 4 trillion annually. Despite this short-term funding gap, global clean energy investment has grown 10% annually since 2019, outpacing GDP growth of 3%.
Investment trajectories will vary significantly depending on whether most investments come from the public or private sector. Scenarios do not prescribe recommendations for governments, nor do they represent the most likely projections of future developments. Instead, a scenario analysis may quantify the implications of public-sector-led versus capital-market-driven scenarios, helping governments assess their feasibility and determine policy actions.
In a baseline scenario, assuming climate investment growth in both public and private sector continue along recent trends, EMDEs other than China face a cumulative shortfall of USD 10 trillion to meet the Paris Agreement’s ambition by 2050. China’s investments are on track to align with a net-zero pathway by 2028, while advanced economies would be aligned by 2041, provided recent investment trends continue.
In a scenario where the public sector provides all the additional financing to meet investment needs by issuing debt, the public debt-to-GDP ratio in advanced economies would rise by 25 percentage points over the 2024-50 period, and by 41 percentage points in China. In EMDEs other than China, the debt-to-GDP ratio would grow from 59% in 2024 to 75% in 2040, beyond which further fiscal expansion may not be sustainable, necessitating climate finance support from advanced economies beyond the New Collective Quantified Goal on Climate Finance agreed at COP29.
In a scenario where the private sector provides all the additional financing to meet investment needs, capital markets would need to develop substantially. This is particularly critical for the energy bond markets in EMDEs other than China, which would need to grow at an annual rate of 9% between 2024 and 2050.
Energy companies in advanced economies relied more on bond financing (30% of total debt and equity) than those in EMDEs other than China (12%) and China (4%) in 2023. Greater access to market-based debt may be necessary for companies in the energy sector in EMDEs to finance long-term investments.
Across all three scenarios analysed in this chapter, the bond debt of energy companies in EMDEs grows at about twice the rate of projected GDP, while it expands in line with GDP in advanced economies. These scenarios underscore the immense challenge of leveraging debt markets for the transition to a low-carbon economy. However, they also reaffirm the private sector’s potential to drive this transformation.
The latest numbers on climate transition investments are both a cause for optimism and concern. Total clean energy investments reached USD 2 trillion in 2024, a substantial increase of 61% from USD 1.2 trillion in 2019, reflecting a compound annual growth rate of 10%. However, these recent investments are less than half of the projected investment needs of USD 4.1 trillion a year for 2026-30 to align with a pathway to reach the ambition of the Paris Agreement. Bridging this gap poses challenges for advanced economies and China but is especially daunting for other EMDEs. Clean energy investments in EMDEs other than China must increase to five times their current level by 2035.
However, focusing solely on investment needs for the climate transition does not provide a complete picture of the challenge. First, while absolute values exceeding USD 4 trillion annually are significant, they must be considered against global GDP of USD 110 trillion in 2024, annual average equity capital raised by listed companies of USD 852 billion between 2019 and 2023, and, as discussed in previous chapters, total issuance of sovereign bond debt at USD 18 trillion on average annually during 2020-24, and corporate bond debt at USD 6 trillion. Second, companies may reinvest revenues from operational projects, gradually reallocating capital from high-carbon assets to clean energy where profitable. For instance, even disregarding the reinvestment of their profits, companies in the energy sector had USD 777 billion available for reinvestment in 2023 – equivalent to the depreciation and amortisation of their assets. Third, framing investments by 2050 solely for a net-zero transition overlooks the broader need for energy investments in regions with growing populations or dynamic economies (e.g. Sub-Saharan Africa and Southeast Asia) and to ensure energy security for countries lacking sufficient domestic oil and gas production (e.g. Europe).
Scenario analysis helps to pragmatically assess the challenge of financing the transition to a net-zero economy while considering the abovementioned points. The financing trajectories will look very different depending on whether the public or private sector finances most of the investment. In a baseline scenario, assuming climate investment growth and public sector investment continue along recent trends, China’s investments are on track to align with a net-zero pathway by 2028, while advanced economies would not be aligned with the Paris Agreement goals until 2041. In this scenario continuing at current growth rates, EMDEs other than China face a cumulative shortfall of USD 10 trillion to meet the Paris Agreement’s ambition, even with the New Collective Quantified Goal on Climate Finance (NCQG) agreed at COP29.
In a scenario where the public sector provides the necessary additional financing to meet the investment requirements rapidly, public debt levels would rise significantly. In EMDEs other than China, the public debt-to-GDP ratio (defined based on general government total debt) would grow from 59% in 2024 to 75% in 2040, assuming governments balance the revenues and expenditures, and finance only climate investments through new debt. In advanced economies, the debt-to-GDP ratio would rise from 115% in 2024 to 139% in 2050, partly due to increased climate-related development assistance for EMDEs other than China after 2040 when their public debt levels reach an assumedly unsustainable level. China’s debt-to-GDP ratio is projected to rise from 90% to 131% over the same period. These high public debt levels may be sustainable only in a macro-economic environment with low interest rates and high economic growth.
In the opposite scenario where the private sector provides the additional financing to meet the investment requirements, public debt levels could remain stable, but capital markets would need to develop substantially. This is especially true of bond markets for energy companies in EMDEs other than China, which would need to grow at an estimated annual rate of 17% between 2024 and 2035. While this growth is theoretically feasible, it would be even higher than the noteworthy growth in China’s corporate bond markets in the last decade (12% per year on average). An annual increase of 17% would require favourable macro-economic conditions and significantly improved regulatory frameworks in EMDEs other than China.
In all three scenarios in this chapter, it is notable that energy companies in advanced economies see their debt and equity developing in line with GDP growth: while annual GDP growth is expected at 1.4% between 2024 and 2050, bond and equity markets are projected to grow between 0.7-1.8% and 0.5-1.2% annually, respectively, depending on the scenario. In China, capital market growth in all scenarios is approximately double the expected GDP growth of 1.8% annually, with bond and equity markets for energy companies growing at 2.9-4.6% and 3.1-4.9%, respectively. In other EMDEs, the relationship between GDP growth and bond capital market development is similar to China (around twice) in two of the scenarios but diverges in the scenario where capital markets play a leading role. Here, bond markets for energy companies in EMDEs other than China are projected to grow 9.1% annually by 2050, compared to projected GDP growth of 2.5%.
The potential for growth in the sustainable bond market is even greater than that of the overall bond market, given the role of sustainable bonds in financing climate transition investments. In advanced economies, sustainable bonds accounted for 13% of outstanding bonds issued by energy companies as of 2024, with all scenarios indicating a rise to 94-97% by 2050 if sustainable bonds were to finance all climate transition investments. A similar trend is expected in China, where the share stood at 12% in 2024 and is projected to reach 97-98% by 2050. In EMDEs other than China, the initial share was lower at 10% in 2024, with projections for 2050 varying between 90% and 91%, depending on the scenario.
These scenarios underscore the immense challenge of leveraging debt markets for the transition to a low-carbon economy. However, they also reaffirm the private sector’s potential to drive this transformation. To unlock this potential, financial regulatory reforms will be essential, particularly to enhance capital market development in EMDEs. With smart policies and well-functioning markets, countries can mobilise the necessary investment for growth and build a financial system that is not only resilient but also catalytic for a sustainable transition.
This section reviews recent investments in the climate transition and provides estimates of the investments required to meet the Paris Agreement goals, broken down by economic sector and region.
Recent investments in the climate transition
Various organisations report estimates of recent investments in climate transition and clean energy, employing differing methodologies and scopes as well as varying reference years. Table 4.1 presents estimates from BloombergNEF (BNEF, 2024[1]), the Climate Policy Initiative (CPI, 2024[2]), the International Energy Agency (IEA, 2024[3]) and McKinsey & Company (McKinsey, 2022[4]). Both the IEA and McKinsey report total annual investments of USD 2 trillion, albeit for different reference years and scopes. The IEA’s analysis provides estimates for 2024 that encompass clean energy investments, including power generation, electricity networks, end-use technologies and energy efficiency measures. McKinsey, reporting for 2021, focuses on low-emission assets, reflecting a broader scope that accounts for technologies with reduced but not zero greenhouse gas emissions.
BloombergNEF (BNEF) estimates USD 1.8 trillion in climate transition investments for 2023. The Climate Policy Initiative (CPI) provides the lowest estimate, ranging from USD 1.5 to 1.6 trillion for 2023, due to its different scope and focus on primary capital flows directed toward physical climate-related assets, excluding broader supply chain costs and indirect expenditures. Examples of broader supply chain costs include investments in manufacturing components for solar panels, such as photovoltaic cells, and indirect expenditures encompass policy-induced mechanisms, such as subsidies supporting clean energy projects.
Note: BNEF covers deployment of net-zero-aligned technology and infrastructure. CPI captures primary capital flows in clean energy and climate resilient infrastructure CPI (2023[5]), Global Landscape of Climate Finance 2023 Methodology, https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2023/. IEA data covers energy (power generation, electricity grids and battery storage), energy-efficiency in transport, buildings and industry, and clean fuels. McKinsey focuses on low-emission assets.
Source: BNEF (2024[1]), Energy Transition Investment Trends 2024, https://about.bnef.com/energy-transition-investment/; CPI (2024[2]), Global Landscape of Climate Finance 2024: Insights for COP29, https://www.climatepolicyinitiative.org/publication/global-landscape-of-climate-finance-2024/; IEA (2024[3]) World Energy Investment 2024, https://www.iea.org/reports/world-energy-investment-2024; McKinsey (2022[4]), The net-zero transition: What it would cost, what it could bring, https://www.mckinsey.com/capabilities/sustainability/our-insights/the-net-zero-transition-what-it-would-cost-what-it-could-bring.
The IEA offers a granular breakdown of recent climate transition investments and future investment needs to meet net-zero targets, detailing requirements across subsectors and regions. While the IEA’s investment scope focuses on climate change mitigation and partially includes cross-cutting elements (i.e. investments accounting for both climate change mitigation and adaptation goals), it does not comprehensively capture climate change adaptation investments, compensation for loss and damage, and nature preservation. Investments in climate adaptation and nature preservation are discussed below but are not part of the main analysis in this chapter.
The IEA describes total climate transition investments as "Total clean energy" investments and disaggregates them into low-emission power, transport, low-emission fuels and other sectors.
Low-emission power includes power generation technologies such as renewables, nuclear energy, and fossil fuels with carbon capture, utilisation and storage (CCUS). This category also covers energy storage systems and electricity networks for integrating and distributing energy.
Transport encompasses energy-efficiency and end-use investments in road vehicles, rail transport and aviation, electric vehicles and technologies related to clean fuels and batteries.
Low-emission fuels include clean fuels such as hydrogen and biofuels, and transitional fossil fuels.
Other describes investment in energy-efficiency and end-use in other sectors such as industry and buildings.
Figure 4.1 shows that total clean energy investments reached over USD 1.8 trillion in 2023, marking a significant increase of approximately 47% from USD 1.2 trillion in 2019, equivalent to a compound annual growth rate (CAGR) of approximately 10%. Investments in the low-emission power sector dominate, accounting for USD 1.2 trillion or 63% of the total in 2023. Within this category, power generation investments — comprising Renewables, Nuclear and CCUS — total USD 744 billion (41% of total clean energy investments), with renewables representing the vast majority at USD 677 billion (37%), growing 60% from 2019, equivalent to a CAGR of 12%. In contrast, although investments in nuclear power and CCUS have grown, they remain minimal. Investments in electricity networks reached USD 374 billion (20%), while energy storage saw significant growth, rising to USD 41 billion (2%) from just USD 5 billion in 2019, equivalent to a CAGR of 66%.
Investments in clean energy transport reached USD 259 billion in 2023 (14% of total clean energy investments), representing a 260% increase from USD 72 billion in 2019 and an equivalent CAGR of 38%. Investments in clean fuels reached USD 19 billion (1%) in 2023.
Total clean energy investment grew 47% in 2019-23, mainly driven by investments in renewables (60% growth) and transport (260% growth)
Source: IEA (2025[6]), Proprietary database; IEA (2021[7]), World Energy Investment 2021, https://www.iea.org/reports/world-energy-investment-2021; IEA (2016[8]), World Energy Investment 2016, https://www.iea.org/reports/world-energy-investment-2016.
Climate investment needs by 2030 and 2050
Estimates for annual global climate finance needs vary across organisations due to differences in scope, methodological approaches and assumptions (Falduto, Noels and Jachnik, 2024[9]). For instance, the forecast for economic growth (and, therefore, energy demand) and the future costs of implementing different technologies impact estimations of investments needed. The global estimates for 2030 and 2050 by BNEF, CPI, the IEA, the Independent High-Level Expert Group on Climate Finance (IHLEG), the Intergovernmental Panel on Climate Change (IPCC) and McKinsey are the following:
BNEF estimates that meeting net-zero targets requires annual investments of USD 5.4 trillion by 2030 and up to USD 7.4 – 8.0 trillion by 2050 (BNEF, 2024[10]).
CPI has the highest estimation of required financing based on a review of estimates developed by other institutions, with a range of USD 5.4 trillion to USD 11.7 trillion annually by 2030 and a range of USD 9.3 trillion to USD 12.1 trillion by 2050, reflecting a broader coverage of investment requirements including areas such as adaptation finance (CPI, 2024[11]; CPI, 2023[5]).
The IEA, focusing on the sectors detailed in Figure 4.1, projects average annual investments of USD 4.1 trillion between 2026 and 2030, peaking at USD 4.5 trillion within this period. Investments are expected to rise further, reaching at least USD 4.9 trillion annually between 2031 and 2050.
The IHLEG estimates annual financing needs at USD 6.3 – 6.7 trillion by 2030, emphasising the need to mobilise resources for emerging market and developing economies (IHLEG, 2024[12]).
McKinsey estimates an annual average investment requirement of USD 6.5 trillion in low-emission assets by 2050, including a reallocation of USD 1 trillion from high- to low-emission investments (McKinsey, 2022[4]).
The IPCC estimates an annual investment need between USD 2.3 trillion and USD 4.5 trillion by 2030 considering energy, energy-efficiency, transport and agriculture, forestry and other land use sectors, based on a review and synthesis of existing studies with varying scopes (Kreibiehl, 2022[13]).
The projected investment needs by BNEF, CPI, the IEA, IHLEG, IPCC and McKinsey are based on varying methodologies and target different net-zero emission timelines and global warming limits. For example, BNEF’s scenario achieves net-zero emissions but limits global warming to only 1.75°C. In contrast, the IPCC provides an estimate range that keeps global warming broadly below 2.0°C compared to pre-industrial levels. The scenarios by CPI, the IEA, IHLEG and McKinsey achieve net-zero emissions by 2050 and limit global warming to 1.5°C, aligning closely with the highest ambition in the Paris Agreement.
According to the IEA, the energy sector accounted for 37.4 billion tonnes of CO₂ equivalent (GtCO₂e) in 2023 (IEA, 2024[14]). Meanwhile, the United Nations Environment Programme (UNEP) estimates total global GHG emissions at 57.1 GtCO₂e for the same year (UNEP, 2024[15]), meaning that the energy sector was responsible for approximately two-thirds of total global emissions. Given the sector’s substantial impact on global emissions and the scale of investments required for its transition (as outlined below in the “Estimates of future financing needs by economic sector” section), the following analysis focuses on the energy sector. The analysis relies on IEA estimates, which provide detailed regional and sectoral breakdowns, providing insights into investment needs and sources of financing.
Estimated global climate financing needs range from USD 4.5 trillion to USD 12.1 trillion annually, where the lower-end estimate averages at USD 5.1 trillion by 2030
Source: BNEF (2024[10]), New Energy Outlook 2024, https://about.bnef.com/new-energy-outlook/;CPI (2024[11]), Top-down Climate Finance Needs, https://www.climatepolicyinitiative.org/publication/top-down-climate-finance-needs/;IEA (2024[11]), World Energy Outlook 2024, https://www.iea.org/reports/world-energy-outlook-2024; IEA (2023[16]) Net Zero Roadmap, https://iea.blob.core.windows.net/assets/4d93d947-c78a-47a9-b223-603e6c3fc7d8/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf; IHLEG (2024[12]), Raising ambition and accelerating delivery of climate finance, https://www.lse.ac.uk/granthaminstitute/publication/raising-ambition-and-accelerating-delivery-of-climate-finance/; Kreibiehl (2022[13]), Investment and finance. In IPCC, 2022: Climate Change 2022. Contribution of Working Group III to the Sixth Assessment Report of the IPCC, https://www.ipcc.ch/report/sixth-assessment-report-working-group-3/; McKinsey (2022[4]), The net-zero transition: What it would cost, what it could bring, https://www.mckinsey.com/capabilities/sustainability/our-insights/the-net-zero-transition-what-it-would-cost-what-it-could-bring.
Estimates for future investment needs by region
Methodology and underlying 2050 net-zero scenario
The IEA estimates represent investment needs in its Net Zero Emissions by 2050 (NZE) scenario (IEA, 2023[17]; 2021[18]), which outlines a global pathway for energy-related climate transition investments to achieve net-zero CO2 emissions by mid-century. This scenario aims to be consistent with limiting global warming to 1.5°C and meeting the goals of the Paris Agreement.
To calculate the financing requirements necessary to meet net-zero targets, the NZE scenario employs a bottom-up approach, aggregating investment needs across the subsectors outlined above. The IEA distinguishes between power sector investments, which include renewable energy generation, nuclear power and electricity networks, and end-use investments, which encompass energy efficiency and electrification in buildings, industry and transport. Transport investments within the end-use category include expenditures on batteries and charging infrastructure for electric vehicles (EVs) as well as other low-emission transport technologies. Energy efficiency investments focus on improving energy use in buildings, industry and transport, complementing electrification efforts to reduce energy intensity across these sectors. This chapter focuses on the power and transport subsectors and categorises all other investments as “Others”.
The IEA NZE scenario projects that the global population will grow to nearly 9.7 billion by 2050, implying a CAGR of about 0.7% from 2023, while the global economy is expected to grow at a CAGR of 2.7% under the same scenario. In comparison, the OECD long-term scenarios project a world GDP CAGR of 2.0% over the same period.
To align with the NZE scenario, renewable energy capacity must increase from 4,140 GW in 2023 to 11,000 GW by 2030, representing a 2.7-times expansion and a CAGR of 15% over this period. Solar photovoltaic (PV) and wind will be the primary drivers of this growth (IEA, 2023[17]; 2023[19]). By 2050, capacity must reach approximately 29,000 GW according to the IEA NZE scenario, which corresponds to a CAGR of 7.5% over 2023–50. The NZE scenario also anticipates cost reductions in key technologies by 2030, with solar PV costs projected to decline by 40% and battery storage costs by 60% relative to 2020 levels, driven by technological advancements and economies of scale (IEA, 2023[17]; 2021[18]).
Regional investment needs are projected based on differing energy system characteristics and economic structures. Advanced economies are expected to require substantial early investments to meet near-term targets, reflecting their mature infrastructure and existing high emissions levels. Similarly, EMDEs need rapid investments – but on a much larger scale relative to current investment levels – to address fast-growing energy demand and close infrastructure gaps. The projections incorporate factors mentioned above, such as population growth, economic development trajectories and technology adoption rates, emphasising the significant scale-up required in EMDEs to achieve net-zero goals.
Estimated investment needs by regions
In 2023, investments in total clean energy totalled USD 1.8 trillion globally, with advanced economies contributing USD 918 billion, China USD 606 billion, and EMDEs other than China USD 276 billion. Looking ahead, global total clean energy investment requirements to achieve net-zero targets by 2050 average USD 4.1 trillion annually for the period 2026–30, rising to USD 4.9 trillion in 2031-35 before stabilising at USD 4.7 trillion per year over 2036-50 (Figure 4.3).
In advanced economies, annual needs are set to rise from USD 1.8 trillion (2026–30) to USD 2.0 trillion (2031–35) before declining to USD 1.7 trillion (2036–50). In China, they are expected to remain stable at USD 1.0–1.1 trillion through 2035 before falling to USD 0.9-1.0 trillion in 2036-50. In EMDEs other than China, needs are projected to increase from USD 1.2 trillion to USD 1.7 trillion, reaching USD 1.9 trillion annually over 2036–50.
In 2023, advanced economies represented 51% of total clean energy investments, while China accounted for 34% and other EMDEs contributed just 15%. Within EMDEs, China accounted for 69% of total clean energy investments in 2023. Over the last three years, China’s clean energy investments grew at an 18% CAGR. In contrast, clean energy investments by all other EMDEs need to grow substantially from a 13% CAGR over the last three years to align with net-zero pathways. Annual investments in EMDEs other than China need to grow to four times their 2023 level by 2030 and seven times by 2050.
EMDEs other than China need to quadruple their climate transition investments by 2030 to align with net-zero pathways
Note: Figures are annual average investments for the periods, except for 2023, which reflects actual investments.
Source: IEA proprietary database.
Estimates of future financing needs by economic sector
In 2023, the power sector accounted for the largest share of clean energy investments at USD 1.2 trillion. Under the NZE scenario, investments in the sector will rise to an average of USD 2.7 trillion in 2031-35 (54% of total clean energy investments) before moderating to USD 2.3 trillion by 2036-50 (49%). Transport investments, which stood at approximately USD 260 billion in 2023, would reach USD 0.9 trillion in 2036‑50 (21%) of total clean energy investments. Low-emission fuels are expected to grow significantly from USD 19 billion in 2023 to USD 333 billion by 2036-50 (7%). Meanwhile, the “Other” category, encompassing investments in energy-efficiency and end-use in the buildings and industry sectors, would expand from USD 0.4 trillion to USD 1.1 trillion over the same period.
Within the power sector, low-emission power generation investments rise from USD 0.7 trillion in 2023 to USD 1.6 trillion in 2031-35 before moderating to USD 1.0 trillion in 2036-50, while grids and storage investments grow from USD 0.4 trillion to USD 1.1 trillion in 2031-35 before rising further to USD 1.3 trillion in 2036-50, reflecting the increasing need for infrastructure to support clean energy generation and integration.
By 2035, low-emission power investments must grow to 2.3 times their current level to align with net-zero pathways, while transport investments must grow 3.5 times
Note: The “Other” category includes energy-efficiency and end-use investments in the buildings and industry sectors; figures are annual average investments for the periods, except for 2023, which reflects actual investments.
Source: IEA proprietary database.
Investment and future financing needs for climate change adaptation
There are significant differences between current levels of adaptation and mitigation investments. Mitigation investments account for the majority of climate finance, with annual investments expected to have exceeded USD 2 trillion in 2024 (IEA, 2024[3]). Adaptation finance accounts for approximately 7% of total climate finance, totalling USD 46 billion annually (CPI, 2023[20]). The disparity in funding reflects underlying structural challenges: mitigation projects often involve scalable technologies with clear revenue streams, while adaptation projects require localised, often bespoke interventions that reduce the likelihood or negative impact of unexpected events. The benefits of these projects, such as reducing the risk of future damages or losses, depend on uncertain climate outcomes and often do not promise tangible revenues, making them less attractive to private sector investment (UNEP, 2023[21]; UNEP, 2024[22]).
Future adaptation needs are projected to rise to USD 140–300 billion annually by 2030 and up to USD 520 billion by 2050 (CPI, 2023[20]; UNEP, 2023[21]). Studies suggest that every dollar invested in adaptation generates USD 4–10 in economic benefits by averting climate damages (CPI, 2023[20]). While recognising the importance of adaptation activities in combatting climate change, this chapter focuses on mitigation investments contributing to the global climate transition, given their predominance in total climate financing needs and the more active role the private sector takes in funding these projects.
This section explores the current capital structure of companies in the energy sector (which includes both energy and energy-related utilities, as defined in Annex 4.A), focusing on their use of conventional and sustainable bonds.
Public and private sector investments
In 2023, the public sector accounted for 24% of climate mitigation investments in advanced economies, 25% in EMDEs other than China, and 33% in China (IEA, 2025[6]). These shares have remained stable across regions in recent years. In advanced economies and China, public sector financing primarily reflects government spending.
Capital structure in the energy corporate sector
While climate change mitigation investments encompass various sectors, the remainder of the analysis in this section focuses on the energy sector. The main reason for this is that energy sector climate transition investments in the IEA’s NZE scenario are substantially higher than in alternative scenarios that do not meet the Paris Agreement goals, such as the IEA’s Stated Policies Scenario (STEPS) or Announced Pledges Scenario (APS), leading to an increase in the market size of the energy sector. The section Evolution of bond and equity markets in energy estimates the resulting energy sector’s bond and equity market sizes.
In contrast, the Transport Outlook 2023 (ITF, 2023[23]) shows that Paris Agreement-aligned transport investments, as outlined in its High Ambition scenario, lead to lower investment needs due to more efficient use of infrastructure and a shift towards sustainable transport modes. Core infrastructure investment needs are estimated at 1.7% of global GDP annually through to 2050 under the Current Ambition scenario, and marginally less (1.6%) under the High Ambition scenario. Therefore, climate change mitigation investments in the transport sector are unlikely to increase its bond and equity market size substantially.
The capital structure (i.e. the share of financing sources) of listed companies in the energy sector and its subsectors—such as fossil fuels and renewable energy—varies based on the nature of their business models and the development of the banking sector and capital markets in the countries they operate in. This section builds on a sample of 1 000 listed companies in the energy sector and breaks down their capital structure into bonds, non-marketable debt (and other liabilities) and equity. The sample covers around half of the number of listed energy companies globally and nearly half of the total assets in the energy sector (see Annex 4.A for more information). While non-marketable debt includes bank loans and finance leases, other liabilities include, for instance, accounts payable, deferred revenues, pension and other post-employment benefit obligations, and deferred taxes.
The results are presented following two distinct methodologies:
1. With bonds, non-bond debt, and equity as a share of total debt and equity, representing the financing instruments of companies in the sector (Figure 4.5, Panel A).
2. With bonds, non-bond debt, other liabilities, and equity as a share of total assets (i.e. equity + liabilities) providing a broader view of companies’ sources of financing for their total assets (Figure 4.5, Panel B).
The section “Evolution of bond and equity markets in energy” estimates the development of energy sector assets based on the IEA NZE investment requirements, and using the fundamental accounting identity that assets must equal financing sources, it translates the increase in assets into the sector’s total financing sources, according to methodology 2.
Bond financing is more prevalent in advanced economies, while EMDEs other than China rely more on equity financing
Note: Shares are shown for total values in the sector (i.e. larger companies have a higher weight in the calculations). This analysis is based on company financial data of 2023 as data for 2024 was not yet available for most companies at the time of publication.
Source: OECD Corporate Sustainability dataset, LSEG.
In 2023, companies in advanced economies relied more on bond financing (30% of total debt and equity) than companies in EMDEs other than China (12%) and China (4%). In contrast, non-bond debt accounted for a larger share in China (35%) compared to advanced economies and EMDEs other than China (18%), as shown in Figure 4.5 Panel A. Across regions, equity remains companies’ primary source of financing, with EMDEs other than China having the highest relative share at 70%. In comparison, equity accounted for 52% of companies’ financing in advanced economies and 61% in China.
When considering the relative shares out of total assets (i.e. incorporating other liabilities), as shown in Figure 4.5 Panel B, the regional differences mentioned above remain consistent while the absolute percentage of bonds and equity out of the larger denominator decreases. This effect is more pronounced in advanced economies as they have a comparatively greater share of other liabilities. Underlying reasons may include differences in supply chain complexity and financing models, as energy companies in advanced economies often rely on long-term contracts and corporate-backed financing, leading to higher deferred revenues and accounts payable. The energy mix in advanced economies, with a higher share of renewables requiring diverse supply chains and contractors, may also contribute to this difference.
Corporate and sustainable bond market trends in the energy sector
In 2024, the total outstanding amount of corporate bond debt in the energy sector reached more than USD 3 trillion in advanced economies, USD 504 billion in EMDEs other than China and USD 406 billion in China. Sustainable energy bonds represented 13% of outstanding corporate energy bond debt in advanced economies, 10% in EMDEs other than China, and 12% in China.
Sustainable bonds are designed to support projects with environmental and social benefits and can be classified into two major categories: "use of proceeds bonds" and "sustainability-linked bonds" (SLBs) (ICMA, 2022[24]). Use of proceeds bonds, including green, social, and sustainability bonds (GSS bonds), require funds to be allocated to specific eligible projects, such as renewable energy, clean transportation, or social initiatives like affordable housing. SLBs, on the other hand, do not require proceeds to be tied to specific projects but instead adjust financial terms based on the issuer’s achievement of sustainability performance targets. More information on the recent trends of sustainable bonds is included in Annex 4.B.
Total outstanding corporate bond debt reached USD 4 trillion globally in 2024, with sustainable bonds accounting for over 12%
Source: OECD Corporate Sustainability dataset, LSEG.
Cross-border financing flows
While local capital markets play a vital role in financing the climate transition, cross-border investments also provide a key complement by addressing gaps that domestic resources alone cannot fill, particularly in many EMDEs where local financial markets are relatively less developed. In the private sector, foreign direct investment (FDI) may channel funding to climate mitigation projects across borders. Meanwhile, international development finance provided by official bilateral and multilateral institutions provides essential support for projects that may lack commercial viability.
Foreign direct investment
Recent trends in FDI in renewable energy highlight a growing flow of capital from advanced economies to EMDEs. Reflecting only the net balance of investment flows between the two regions, net greenfield FDI in the renewable energy sector from advanced economies to EMDEs other than China grew significantly from an annual average of USD 38 billion in 2019-21 to USD 103 billion in 2022-23.
Meanwhile, net greenfield FDI in renewables from China to other EMDEs, which averaged USD 2 billion per year between 2019 and 2022, surged to USD 17 billion in 2023, driven by rising and unstable fossil fuel prices, especially since 2022, along with new policies worldwide on climate goals and energy security (OECD, forthcoming[26]).
Net greenfield FDI from advanced economies to EMDEs in renewable energy has grown rapidly since 2022
Note: This figure represents announced capital expenditures in renewable energy. Renewable energy includes solar electric power, wind electric power, geothermal electric power, marine electric power, biomass power, hydroelectric energy and other renewable electric power generation (e.g. clean tech hydrogen).
Source: OECD, Financial Times fDi Markets database.
Climate finance provided and mobilised by international providers
At the 15th session of the Conference of Parties (COP15) to the United Nations Framework Convention on Climate Change (UNFCCC) in 2009, developed countries committed to a collective goal of mobilising USD 100 billion annually by 2020 for climate action in developing countries. In 2015, the goal was extended until 2025. In 2022, developed countries provided and mobilised a total of USD 115.9 billion in climate finance for developing countries, reaching the goal for the first time (Figure 4.8).
Climate finance for developing countries reached USD 115.9 billion in 2022
Note: The gap in time series in 2015 for mobilised private finance results from the implementation of enhanced measurement methods. As a result, grand totals in 2016-22 and in 2013-14 are not directly comparable. Multilateral public climate finance and private climate finance mobilised by multilateral institutions only take into account the share attributable to developed countries.
Source: OECD (2024[27]), Climate Finance Provided and Mobilised by Developed Countries in 2013-22, https://www.oecd.org/en/publications/climate-finance-provided-and-mobilised-by-developed-countries-in-2013-2022_19150727-en.html
(based on Biennial Reports to the UNFCCC, OECD DAC and Export Credit Group statistics, complementary reporting to the OECD).
A large majority of climate finance for developing countries consists of public funding, delivered both bilaterally to developing countries and through multilateral organisations. In 2020-22, it accounted for 83% of total climate finance (Figure 4.9). The remaining part is private finance mobilised by public climate finance flows. In terms of climate themes, mitigation finance accounts for a significant share, representing 60% of total climate finance for developing countries, followed by adaptation finance with 29%, and crosscutting activities representing 11% (Figure 4.9). Mitigation represents 84% of private climate finance mobilised.
Climate mitigation and public-sector climate finance account for the majority of climate finance for developing countries
Source: OECD (2024[27]), Climate Finance Provided and Mobilised by Developed Countries in 2013-22, https://www.oecd.org/en/publications/climate-finance-provided-and-mobilised-by-developed-countries-in-2013-2022_19150727-en.html.
In November 2024, at the 29th session of the Conference of the Parties (COP29) to the UNFCCC, the New Collective Quantified Goal on Climate Finance (NCQG) was established. Its aim is to mobilise at least USD 300 billion annually by 2035 in support of developing countries in addressing climate change. This new goal will supersede the previous USD 100 billion annual target from 2026 onward. This policy development reinforces commitments to developing countries for addressing climate change and sets expectations for further scaling up international climate finance, which will be examined in more detail in the next section.
This section presents three scenarios for financing future climate transition investments across all sectors, each offering readers a distinct angle on how capital markets might evolve, depending on fundamentally different choices made by governments and the private sector. These scenarios comprise a Baseline Scenario (BLS), a Public Sector Scenario (PSS), and a Capital Markets Scenario (CMS). Each scenario incorporates varying assumptions about overall climate mitigation investment growth, public-private sector investment split, climate finance for developing countries and greenfield FDI. Table 4.2 summarises the underlying assumptions and output metrics, which are also explained in greater detail in the following sections and in Annex 4.A.
These scenarios do not prescribe specific recommendations for governments to adopt any particular approach, nor do they represent the most likely projections of future developments. If anything, the BLS is arguably a more realistic scenario in the short term, with capital markets likely to be somewhere between the two extremes of the PSS and CMS cases in the long term. In fact, part of the value of this scenario analysis exercise lies in illustrating how impractical an excessive reliance on either the public or private sector would be.
Relying predominantly on public funding could result in unsustainable public sector debt levels (and dynamics). Conversely, overreliance on the private sector to bridge the short- and medium-term investment gaps would require private sector investment growth, and the associated increase in market-based debt in EMDEs, to increase significantly from current levels. This effort to quantify the consequences of public-sector versus capital market-focused approaches allows to assess their viability and determine appropriate policy actions.
The following section presents the BLS, where climate investment growth, public sector investment shares, and greenfield FDI continue along historical trends, while development finance meets COP29 goals by 2035 (UNFCCC, 2024[28]). The subsequent section presents the PSS, where private sector investments are assumed to continue along past trends, and the public sector steps up to finance the remaining gap needed to meet the climate mitigation investment requirements of the IEA NZE scenario described in the “Climate investment needs by 2030 and 2050” section. This results in a variable public sector investment contribution and debt-to-GDP ratios, representing output metrics in this scenario.
Lastly, the CMS assumes that governments face debt-to-GDP limits (90% for advanced economies, 60% for EMDEs other than China, and 80% for China), while capital market-driven private sector investment meets the requirements set by the IEA NZE. The debt-to-GDP limits stem from the two triggers of debt reduction mechanisms in the new EU fiscal rules, which are established at 60% and 90% debt-to-GDP (European Parliament, 2024[29]). The CMS also assumes that greenfield FDI triples (as a proportion of private sector investment) by 2035.
The PSS and CMS build on baseline debt-to-GDP estimates from the OECD (for advanced economies) and the IMF (for EMDEs). These baseline figures do not account for public-sector climate transition expenditure in the IEA NZE. Therefore, future public-sector financing for climate transition investments in line with the IEA NZE represent an additional government debt-burden in the scenario analysis in this chapter. In all scenarios, the public sector debt-to-GDP ratio is assumed to remain at its baseline level in the absence of climate transition investments, abstracting from other pressures on public finances, such as those arising from ageing populations (Guillemette and Turner, 2021[30]).
Baseline scenario
The BLS scenario does not require climate mitigation investments to meet the annual targets set by the IEA NZE scenario and instead assumes that investment growth initially follows the average rate of the last three years (2022–24). The difference between projected actual and required investments is described as the investment gap, and annual gaps carried forward result in a cumulative investment gap. This simplified scenario does not account for increased future investment needs due to delayed investments in prior periods.
Initially, continued investments based on past growth rates create financing gaps across all regions. However, as shown in Figure 4.3, climate transition investment requirements decline on average after 2035 in advanced economies and China, facilitating a reduction and eventual closure of the investment gap. For EMDEs other than China, the IEA NZE scenario projects further increases in investment requirements after 2035.
The BLS assumes that investment growth converges to long-term GDP growth as the gap between actual and required investments narrows. Once the cumulative gap is closed and turns into a surplus—where actual investments exceed requirements—investment growth slows further to stabilise the surplus, as is the case for advanced economies and China. In contrast, EMDEs other than China do not achieve a zero cumulative gap in the BLS, reflecting their historically low investment levels. Their cumulative gap amounts to USD 10.1 trillion by 2050.
If investment growth in 2025 continues at the average rate of the last three years - 8% for advanced economies, 13% for EMDEs other than China, and 18% for China - the projected annual investment for 2025 is estimated to fall short of the required levels by 15-20% in advanced economies, 5-10% in China, and 45-50% in EMDEs other than China. The comparatively lower growth in advanced economies does not preclude them from closing the gap, given their relatively higher current levels of investment. China, with the highest growth and the smallest gap, is expected to close the gap by 2028, compared to 2041 for advanced economies.
The BLS assumes constant public and private sector shares of climate mitigation investments as of December 2023, consistent with recent trends (IEA, 2024[3]). In 2023, the private sector accounted for 76% of total clean energy investments in advanced economies, 67% in China, and 75% in EMDEs other than China.
Greenfield FDI to EMDEs other than China remains constant as a proportion of private sector investment in advanced economies and China. The scenario does not impose sovereign debt-to-GDP limits and assumes that total development climate finance grows in a linear fashion to USD 300 billion by 2035, as per the COP29 agreement (UNFCCC, 2024[28]), and remains constant thereafter. Lastly, debt-to-equity and corporate bond-to-non-bond debt ratios are also assumed to remain at December 2023 levels.
As in all scenarios, the equity and bond market sizes required to finance future climate mitigation-related investments are treated as output metrics. Figure 4.10 shows projections for actual and required annual investments (secondary axis) and the resulting cumulative gap or surplus (primary axis).
Climate mitigation investments in AEs and China balance initial investment gaps while EMDEs other than China have a cumulative gap of USD 10.1 trillion by 2050
Note: Public sector investment includes the new COP29 development finance goals agreed on in November 2024. The scenario assumes a linear increase from USD 115.7bn in 2022 to USD 300bn in 2035 while subtracting the private sector contribution and development finance for climate change adaptation based on their average relative shares over the period 2019–22 (OECD, 2024[27]).
Source: OECD, IEA proprietary database.
Public sector scenario
The Public Sector Scenario (PSS) assumes that private sector investment continues to grow at the average rate of the last three years (L3Y), while the public sector provides the additional financing needed to meet the annual investment requirements of the IEA NZE scenario. As a result, there is no investment gap in this scenario. The analysis assumes that all public sector investment is financed through government debt rather than, for example, through additional taxes.
In contrast to the BLS, the PSS imposes a 75% public-debt-to-GDP limit for EMDEs other than China and assumes that any additional public sector investment required beyond this limit is financed through increased development finance contributions from advanced economies. Figure 4.11 illustrates the resulting projections.
While in the PSS all regions initially require increased public sector investment, this effect is most pronounced in EMDEs other than China. In advanced economies, the public sector’s share of total climate change mitigation investment rises from 24% in 2023 to 37% in 2025 and 44% in 2026 and 2027, before gradually declining from 2028 onward. This implies a public sector climate change mitigation investment CAGR of 46% in 2023-25. In China, public sector investment would need to rise from 33% of total investments in 2023 to 38% in 2025 and then decline thereafter, implying a 2023-25 CAGR of 29%.
To meet investment requirements in EMDEs other than China, their public sector investment would need to grow at a CAGR of over 129% from 2023 to 2025 to meet the IEA NZE required investments. Similarly, the public sector investment share in EMDEs other than China would need to rise from 25% in 2023 to 59% in 2025. This share remains elevated at 63-65% from 2026 to 2028 before gradually declining. EMDEs other than China would also reach their debt-to-GDP limit of 75% by 2041, necessitating USD 1.6 trillion in additional development finance from AEs from 2041 to 2050 (USD 162 billion a year on average) to close their climate change mitigation investment gap.
Given the central role of the public sector in this scenario and their governments’ higher capacity to issue debt securities due to relatively lower domestic interest rates, no specific debt-to-GDP limits were established for advanced economies and China. To finance their domestic investment needs and support projected development financing for EMDEs other than China, advanced economies are projected to see an increase in their debt-to-GDP ratio by 25%, rising from 115% in 2024 to 139% by 2050. Similarly, for China to meet its domestic investment needs, its debt-to-GDP ratio is projected to rise by 41%, from 90% to 131% over the same period.
The PSS – as well as the CMS – build on baseline debt-to-GDP estimates from the OECD (for advanced economies) and the IMF (for EMDEs). These baseline figures do not account for public-sector climate transition expenditure in the IEA NZE. Therefore, future public-sector financing for climate transition investments in line with the IEA NZE represent an additional government debt-burden in the scenario analysis in this chapter. It is also important to note that this analysis does not account for other pressures on the public sector, such as that arising from ageing populations, which by itself represents a significant impending burden on public finances (Guillemette and Turner, 2021[30]). Additional spending pressures, including increased defence expenditures, may further contribute to fiscal challenges. The debt ratios presented in this chapter, which include general government gross debt, are not directly comparable with those in chapter one, which covers only central government marketable debt.
As this analysis aims to identify broad, aggregate insights, it does not provide country-level conclusions. As noted by the IMF (2024[31]), developing countries with the weakest credit ratings and relatively high debt-to-GDP ratios face distinct challenges related to debt financing and, consequently, in mobilising the necessary climate transition investments.
While all regions require increased public sector investment initially, this effect is most pronounced in EMDEs other than China
Note: Public sector investment includes the new COP29 development finance goals agreed on in November 2024. The scenario assumes a linear increase from USD 115.7bn in 2022 to USD 300bn in 2035 while subtracting the private sector contribution and development finance for climate change adaptation based on their average relative shares over the period 2019–22 (OECD, 2024[27]).
Source: OECD, IEA proprietary database.
Capital markets scenario
The CMS assumes that projected investments meet the annual requirements set out by the IEA NZE scenario. Unlike the BLS and PSS, the CMS imposes sovereign debt-to-GDP limits of 90% for advanced economies and 80% for China. Compared to the PSS, the CMS has a lower limit for EMDEs other than China (60%). These numbers stem from the two triggers of debt reduction mechanisms in the new EU fiscal rules, which are 60% and 90% debt-to-GDP ratios (European Parliament, 2024[29]).
Once debt-to-GDP limits are reached, the residual investment gap is closed through capital market-financed private sector investment. Therefore, the split between public and private sector contributions remains constant until the debt-to-GDP limit is reached, after which they become output metrics, reflecting the investment contributions needed to meet climate mitigation targets. To meet the required investment levels, EMDEs other than China would need a private sector investment CAGR of approximately 61% from 2023 to 2025. The debt-to-GDP limits of advanced economies and China bind their public-sector investment in 2025 at the start of the projection period, requiring private sector investment CAGRs of 36% and 46%, respectively, over the same period. China’s higher growth rate reflects the historically greater contribution from the public sector there to climate change mitigation (33% in 2023 compared to 24% in advanced economies).
Greenfield FDI as a proportion of private sector investment is assumed to triple by 2035, benefiting from an assumed greater ease with which financial and non-financial companies can make cross-border investments in the CMS. Development finance presents the same values as in the BLS, increasing linearly to USD 300 billion by 2035.
In the CMS, the proportions of equity, bond and non-marketable debt financing for EMDEs other than China are assumed to converge toward those of advanced economies by 2050. This implicitly assumes that the regulatory framework for capital markets in EMDEs other than China will reach a level of quality similar to the one of advanced economies. As of December 2023, the financing structure for advanced economies in the energy sector comprises 52% equity, 30% bonds and 18% non-marketable debt. In contrast, EMDEs other than China rely more heavily on equity (70%) and have lower shares of bonds (12%) and non-marketable debt (18%).
Figure 4.12 illustrates the evolution of financing sources of listed companies in the energy sector in EMDEs other than China from 2023. While their total long-term financing sources would need to grow by a factor of 3.8 by 2050 or at a CAGR of 5.0%, bond markets would expand 9.7 times, or grow at a CAGR of 8.8%, in the same period. This compares to a projected GDP CAGR of 2.5%.
While the long-term financing instruments in EMDEs other than China would need to grow 3.8 times from 2023 to 2050 (CAGR of 5.0%), bond markets would need an increase by a factor of 9.7 (CAGR of 8.8%) in the same period
Note: Figure excludes liabilities other than debt. Equity represents book equity.
Source: OECD, IEA proprietary database, LSEG.
The analysis in Figure 4.12 above begins with the book value of bonds and non-bond debt of listed energy companies as of December 2023, as well as the book value of their shares (see more about their capital structure in the “Capital structure in the energy corporate sector” section). It incorporates new equity and debt financing necessary to meet the investment requirements for clean energy and high-emitting energy assets based on the IEA NZE. The analysis assumes that companies will be profitable in all years (i.e. revenues will be higher than costs), allowing them to reinvest revenues equivalent to depreciation, which is kept constant as a proportion of non-current assets throughout the period. The source of equity financing in the analysis can be either the reinvestment of profits or the issuance of new shares, so there is no assumption in relation to how profitable companies in the energy sector will be.
Analysing the energy sector as a whole effectively means that as the combined energy asset base (both low- and high-emitting) depreciates, the existing, relatively higher-emitting assets are gradually replaced by an increasing share of low-emitting ones, resulting from the IEA NZE investment shares in low- and high-emitting assets. Additionally, the CMS assumes that listed companies finance 90% of all future private sector investments (as referred to below, private equity assets and capital committed represent approximately 10% of public equity and bond markets).
Cross-border investments and climate finance from international providers
All scenarios account for cross-border investments in EMDEs other than China by reducing their domestic investment needs (as defined by the IEA NZE) based on net greenfield FDI inflows from advanced economies and China. Net FDI flows between advanced economies and China were excluded from the three scenarios due to their historically low levels, with average annual renewable energy investment net flows being less than USD 400 million between 2020 and 2023. FDI flows between advanced economies are not considered because the scenarios aggregate advanced economies in one group, as for EMDEs.
In the BLS and PSS, greenfield FDI is assumed to remain constant as a proportion of private sector investment in advanced economies and China. In 2022-24, FDI in renewable energy directed towards EMDEs other than China represented on average 12.7% of domestic clean energy investments from advanced economies and 3% from China. These percentages were applied to actual investments in the energy sector in 2023 and to projected investments in the BLS and PSS in subsequent years. This approach allows for estimations of FDI not only in renewable energy but also across all other technologies to be included in the analysis.
In the CMS, the share of greenfield FDI will triple by 2035, reaching approximately 38% in advanced economies and 9% in China. Total greenfield FDI to EMDEs other than China in 2023 was estimated to amount to approximately USD 127 billion, of which USD 110 billion (87%) originated from advanced economies and USD 17 billion (13%) from China (Figure 4.7).
Figure 4.13 illustrates greenfield FDI to EMDEs other than China across all three scenarios. In the CMS, greenfield FDI rises to a peak of USD 622 billion in 2035 (an increase of 4.9-times compared to 2023) before stabilising at around USD 475 (an increase of 3.7-times) billion in the long term. In contrast, in the BLS and PSS, greenfield FDI does not exceed USD 250 billion and eventually stabilises at around USD 150 billion. This compares to an increase of approximately five times over the last decade (OECD, forthcoming[26]).
Development finance for climate is assumed to grow linearly in all three scenarios, reaching the New Collective Quantified Goal on Climate Finance (NCQG) agreed at COP29 by 2035. Only in the PSS is additional development finance for climate provided by advanced economies to EMDEs other than China, when these countries reach their assumed 75% debt-to-GDP limit. The analysis focuses on climate finance provided by the public sector (bilaterally or through multilateral institutions) for climate change mitigation. It therefore excludes from the total NCQG the private sector investments mobilised by public climate finance (these investments would be captured as FDI) and any investments in climate adaptation, which are outside the scope of the scenarios.
Greenfield FDI stabilises at around USD 475bn in the CMS (an increase of 3.7-times compared to 2023), while it remains flat at around USD 150bn in the BLS and PSS towards 2050
Source: OECD, IEA proprietary database.
Development finance for climate reduces the burden on the public sector in EMDEs other than China in the scenarios, while increasing the debt-to-GDP ratio of advanced economies from which it originates. The debt issuance related to development finance is allocated to advanced economies in the scenarios for four main reasons: (i) some of the development finance is in the form of grants or concessional agreements, which would not create any debt burden or would give rise to debt that is easier to service; (ii) part of the development finance loans are provided directly to projects, and do not create public debt in EMDEs; (iii) allocating the debt issuance related to development finance to both AEs and EMDEs would be to count twice the same investment; (iv) the main focus of this chapter is the development of public bond markets, which would not include loans received by EMDE governments. As a result, the debt-to-GDP ratio of advanced economies is projected to reach 139% by 2050 in the PSS, compared to 136% in the BLS.
Figure 4.14 illustrates the baseline development finance (aligned with COP29 goals) across all scenarios, as well as the additional development finance required in the PSS.
The PSS projects an average of USD 162 billion annually in additional required public-sector-funded development finance for EMDEs other than China in 2041-50, after their public debt-to-GDP reaches 75% in 2040
Source: OECD, IEA proprietary database.
Evolution of bond and equity markets in energy
The investments in each scenario are accompanied by a distinct evolution of equity and bond markets across the three regions analysed in this chapter. The share of each financing source—equity, bonds and non-bond-debt and other liabilities—in the energy sector was determined by analysing the capital structure of a sample of 1 000 randomly chosen companies in the energy sector (see in the above section “Capital structure in the energy corporate sector”).
The share of bond debt relative to total assets in the energy sector is 21% in advanced economies, 9% in EMDEs other than China, and 3% in China. In EMDEs other than China, these shares remain constant in the BLS and PSS but converge toward the capital structure of companies in advanced economies in the CMS, reaching parity by 2050.
This section’s projection of public markets begins with market value equity and total outstanding bonds as of December 2024. Subsequently, the analysis incorporates investments for clean energy and high-emitting energy assets based on the IEA NZE and assumes constant depreciation as a proportion of non-current assets. Similar to Figure 4.12, this implies that depreciation is effectively “reinvested,” and the projected reduction in investments in high-emitting assets partially offsets higher investment needs in clean energy. Such reinvestment can occur either directly, through an energy company engaged in both fossil fuels and clean energy, or indirectly, through an investor who channels financial returns from fossil fuel companies into clean energy enterprises.
Evolution of bond markets in energy
The following graphs depict the evolution of bond and equity markets in the three scenarios and regions. In Figure 4.15, the analysis includes 2024 data on bonds issued by listed and unlisted companies in the energy sector, assuming that the outstanding amounts of bonds issued by unlisted companies grow in line with those issued by listed companies to illustrate the overall bond market development. All scenarios assume that 10% of equity and non-market-based debt funding is raised by unlisted companies (as referred to below, private equity assets and capital committed represent approximately 10% of public equity and bond markets).
The total energy bond markets in EMDEs other than China would need to grow 9.6-times (at a CAGR of 9.1%) in the CMS and rise to a market size of approximately USD 4.9 trillion from USD 0.5 trillion in 2024
Note: GDP in Volume Terms at 2015 Purchasing Power Parities. BLS and PSS bond outstanding trends overlap in panels B and C.
Source: OECD, IEA proprietary database, LSEG.
In December 2024, energy bond markets in advanced economies stood at USD 3.2 trillion and are projected to reach USD 4.1 trillion, 3.8 trillion, and 5.0 trillion in the BLS, PSS, and CMS, respectively, by 2050. This represents increases of 1.3-times, 1.2-times, and 1.6-times, corresponding to CAGRs of 1.0%, 0.7%, and 1.8%, respectively. This growth is below the projected GDP CAGR of 1.4% over the same period. It reflects the long-term trend in advanced economies, where GDP growth does not require a proportional increase in energy consumption due to efficiency gains, a structural shift toward less energy-intensive sectors, and changes in energy sources that support sustained economic expansion while moderating energy demand (IEA, 2023[32]; IEA, 2023[33]).
In EMDEs other than China, bond markets were valued at USD 0.5 trillion in 2024 and must expand to USD 1.5 trillion in the PSS, an increase of 2.9-times with a CAGR of 4.2%, and to USD 4.9 trillion in the CMS, reflecting a 9.6-times increase and a 9.1% CAGR. This compares to a projected GDP CAGR of 2.5%.
In China, energy bond markets amounted to USD 0.4 trillion in 2024 and are projected to reach USD 0.9 trillion in the BLS and PSS and USD 1.3 trillion in the CMS by 2050. This represents increases of 2.1-times and 3.2-times, corresponding to CAGRs of 2.9% and 4.6%, respectively. This compares to a projected GDP CAGR of 1.8%.
For context, total outstanding corporate bonds totalled USD 35 trillion as of December 2024 (see Chapter 2) and global equity markets reached a combined value of USD 113 trillion as of December 2023. Additionally, private equity assets and capital committed stood at USD 13.1 trillion as of mid-2023 (McKinsey, 2024[34]).
Evolution of sustainable bond markets in energy
In December 2024, sustainable bonds in the energy sector were valued at USD 408 billion in advanced economies (13% of total energy bonds), USD 52 billion in EMDEs other than China (10%) and USD 50 billion in China (12%). The following figures estimate the sustainable bond market size per region by assuming that sustainable bonds entirely finance new clean energy investments. Investments in high-emitting assets in the IEA NZE scenario are assumed to be financed by conventional energy bonds. Lastly, the analysis in this chapter assumes that existing conventional bonds retire linearly based on twice their value-weighted average maturity, which is 13.7 years in advanced economies, 9.6 years in EMDEs other than China, and 5.4 years in China. Figure 4.16 illustrates the sustainable bond market size per region under each scenario.
In advanced economies, sustainable bond markets in the energy sector are projected to rise by a factor of 9.5 in BLS, 9.2 in PSS and 11.6 in CMS corresponding to CAGRs of 9.1%, 8.9% and 9.9%, respectively. In EMDEs other than China, sustainable bond markets would grow by a factor of 25.1 in the PSS and 84.6 in the CMS. This reflects the assumed convergence towards the capital structure of advanced economies, with a declining share of equity in total financing offset by a rising role for bond financing (as illustrated in Figure 4.15). The CAGRs for sustainable bonds growth are 13.2% in the PSS and 18.6% in the CMS. In China, energy sector sustainable bond markets are projected to grow by a factor of 16.8 in BLS, 16.7 in PSS, and 25.9 in CMS, corresponding to CAGRs of 11.4%, 11.5% and 13.3%, respectively.
Figure 4.17 illustrates the absolute and relative shares of the sustainable and conventional bond markets in the CMS. In advanced economies, the share of sustainable energy bond markets within total energy bond markets needs to increase from 13% in 2024 to 94% by 2050. Over the same period, conventional energy bond markets are projected to contract from USD 2.7 trillion to USD 0.3 trillion, reflecting a CAGR of -7.9%.
The total sustainable bond market in EMDEs other than China would grow by a factor of 84.6 (at a CAGR of 17%) in the CMS
Note: GDP in Volume Terms at 2015 Purchasing Power Parities. BLS and PSS sustainable bond outstanding trends overlap in panel B.
Source: OECD, IEA proprietary database, LSEG.
In EMDEs other than China, sustainable energy bonds would need to rise from 10% in 2024 to 91% of total energy bond markets by 2050, while conventional energy bonds are projected to contract by 4% in size from USD 452 billion to USD 434 billion, representing a CAGR of -0.2%.
In China, the share of sustainable energy bond markets would grow from 12% in 2024 to 98% by 2050. Meanwhile, conventional energy bond markets gradually phase out, driven by the short average maturity of outstanding conventional bonds and the declining role of traditional energy in the NZE scenario by 2050 in China.
The sustainable energy bond market share in EMDEs other than China would need to increase from 10% in 2024 to 91% of its total energy bond market in 2050
Note: GDP in Volume Terms at 2015 Purchasing Power Parities.
Source: OECD, IEA proprietary database, LSEG.
The relatively lower penetration of sustainable energy bonds in EMDEs other than China reflects a higher reliance on high-emitting energy assets until 2050 in the IEA NZE scenario. Between 2036 and 2050, the average share of investments in high-emitting energy assets as a percentage of total energy investments remains at 4.2% in EMDEs other than China, compared to 2.8% in advanced economies and 2.0% in China over the same period.
Evolution of equity markets in energy
In advanced economies, equity markets for the energy sector totalled USD 6.3 trillion in 2023 and are projected to increase by factors of 1.2 (0.7% CAGR) in the BLS, 1.2 (0.5% CAGR) in the PSS, and 1.4 (1.2% CAGR) in the CMS. In China, energy sector equity markets would grow by a factor of 2.4 in the BLS and PSS (3.1% CAGR) and by a factor of 3.8 in the CMS (4.9% CAGR).
In EMDEs other than China, energy equity markets stood at USD 4.0 trillion in 2023 and would increase by factors of 2.1 and 2.2 in the PSS and CMS, respectively. This reflects the convergence towards the capital structure of advanced economies, with a declining share of equity in total financing offset by a rising role of bond financing. While the share of private sector investments in the entire energy sector is higher in the CMS, the share of equity in companies' capital structures is lower compared to the PSS. The CAGRs for equity growth are 2.9% in the PSS and 2.8% in the CMS, compared to a GDP CAGR of 2.5%.
Equity markets in EMDEs other than China would rise by a factor of 2.1 (2.8% CAGR) in the CMS
Note: Equity represents market value; GDP in Volume Terms at 2015 Purchasing Power Parities. BLS and PSS equity market trends overlap in panel C.
Source: OECD, IEA proprietary database.
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The chapter integrates analyses from the International Energy Agency (IEA) and various OECD policy areas, including macro-economic projections, foreign direct investment, climate finance and development co-operation. The chapter includes an examination of the funding structures of companies in the energy sector and financing scenarios that depart from a “business-as-usual” approach. While the scenarios are not predictions about what will effectively happen in the future, they can help policy makers and investors to assess reasonable alternatives depending on the policies that are prioritised.
OECD Corporate Sustainability dataset
The company financials and outstanding bonds data are sourced from LSEG. This dataset contains company- and deal-level information on companies and bonds issued across 103 jurisdictions since 2013. It provides detailed data on:
general company information (e.g. name, country, industry)
consolidated financials (e.g. assets, debt, shareholder’s equity, depreciation)
bond issuance (e.g. bond type, issuance date, maturity date, amount obtained from the issue, classification of sustainable bonds).
For bonds, LSEG data contains both Regulation S and Rule 144A sustainable bonds. Rule 144A presents a safe harbour from the registration requirements of the Securities Act for resales of securities not fungible with securities listed on a US securities exchange to qualified institutional buyers. Regulation S provides a safe harbour from the registration requirements of the Securities Act for offerings made outside the United States (Bruckhaus, 2017[35]). The calculations presented take account of this factor, and an exercise was conducted to eliminate the duplication when a single bond was issued both under Regulation S and Rule 144A.
When calculating the outstanding amount of bonds in a given year, issues that have been redeemed were also deducted. Outstanding values refer to the “principal amount” or otherwise to the “original amount issued” (i.e. the face value of the bonds in their legal documentation) when the “principal amount” could not be retrieved. The early redemption data are obtained from LSEG and cover bonds that have been redeemed early due to being repaid via final default distribution, called, liquidated, put or repurchased. The early redemption data are merged with the primary bond market data via ISINs.
To analyse company capital structure, adjustments are made to align the dates of the outstanding bond data with the company's financial year-end to ensure consistency between the two datasets at company level. Manual checks are conducted to remove data outliers.
The capital structure analysis in Chapter 4 cannot be compared to that of the IEA (2024[3]) because, while the former covers only listed companies and corporate-level financial information, the latter prioritises financial information at the project-level and also covers non-listed companies.
Energy sector
The energy sector is defined to include both energy and energy-related utilities industries and is based on the Reference data Business Classification (TRBC) from LSEG. The following table includes more details on the sectors and industries covered.
Figure 4.7 includes capital investment in greenfield projects that have been announced. They include projects announced by a company, although sometimes the first announcement occurs after the project is already completed. Projects include both new operations being established at new sites and expansions of an existing operations. They do not include investments to maintain already-developed projects and may differ from effective disbursements in new projects as the database primarily covers announced investments. Notably, with the growing trend of investments in the renewable energy sector, announced investments in a given year are expected to exceed effective disbursements for that year.
A review of publicly available reporting from the 20 largest listed companies in the energy sector, as well as the 20 largest unlisted companies (based on LSEG data), reveals that information contained in such reporting on investment flows by geographic region or country is insufficient to derive precise quantitative estimates on cross-border investments. Therefore, the analysis presented in this chapter draws on FDI data from the FT fDi Markets database to assess investment trends in the sector.
Macro-economic data and corresponding assumptions
The analysis in the “Financing scenarios for future investments in the climate transition” section draws on the baseline long-run scenario from the OECD, including GDP growth trends for advanced economies and EMDEs, as well as debt-to-GDP ratios for advanced economies up to 2050 (Guillemette and Château, 2023[36]). All GDP figures are expressed in volume terms at Purchasing Power Parities (PPPs) using 2015 as the base year.
The OECD does not provide a debt-to-GDP ratio scenario for non-OECD countries. Therefore, the analysis relies on IMF debt-to-GDP data for EMDEs, available up to 2029. From 2029 until 2050, the analysis assumes that any growth-driven debt issuance that keeps the ratio stable at 61% is climate-unrelated and that countries do not run ratio-increasing deficits unrelated to climate change mitigation investments. The OECD's debt-to-GDP ratio baseline does not include fiscal costs associated with meeting climate goals. Similarly, the IMF's data do not explicitly account for additional public spending required to meet future climate goals (IMF, 2018[37]). Future public sector investments for climate change mitigation, as outlined in the Financing scenarios for future investments in the climate transition section scenario analysis, represent an additional government debt burden. Furthermore, the methodology in Chapter 4 does not account for potential GDP growth effects stemming from increased climate transition investments.
The debt-to-GDP figures employed in Chapter 4 are obtained from the OECD Economic Outlook and IMF and encompass a broader spectrum of general government debt, as opposed to the other debt-to-GDP figures in Chapter 1, where the primary focus lies in central government marketable debt.
Advanced economies and EMDEs in the analysis generally follow the categorisation of the IMF’s 2024 World Economic Outlook Database (IMF, 2024[38]), except that non-OECD advanced economies are not included. These are Andorra, Croatia, Cyprus, Hong Kong (China), Macau (China), Malta, Puerto Rico, San Marino, Singapore and Chinese Taipei.
Public sector debt limits and debt issuance
The analysis distinguishes between government debt issuance unrelated to climate goals (implicit in OECD and IMF debt-to-GDP scenario baselines) and additional public sector investment needed for climate change mitigation as per IEA NZE investment requirements.
The CMS caps debt-to-GDP for each region, restricting debt issuance for climate change mitigation. Countries are allowed to issue debt tied to GDP growth (i.e. growth-driven debt issuance) to keep the ratio stable. In the absence of such issuance, the debt-to-GDP ratio would decrease over time. However, countries cannot issue debt that increases the ratio beyond the established cap (i.e. ratio-increasing debt).
The PSS caps debt-to-GDP at 75% for EMDEs other than China. The analysis assumes that countries issue growth-driven debt and ratio-increasing debt for purposes unrelated to the climate transition in line with the IMF estimates, where debt-to-GDP of 60.2% in 2023 increases to 61.0% in 2029. From 2029, the analysis assumes that any growth-driven debt issuance that keeps the ratio stable at 61% is climate-unrelated and that countries do not run ratio-increasing deficits unrelated to climate change mitigation investments, as explained in the preceding section.
Conversely, investments in climate change mitigation are driven by ratio-increasing debt issuance (from 61% to 75% over time) and partly by growth-driven debt issuance that keeps the ratio stable at 75% (from 2038 when EMDEs other than China hit their limit) minus the growth-driven debt issuance that would keep the ratio stable at 61% absent any climate mitigation-related investments.
EMDEs other than China in the CMS
The CMS (visualised in Figure 4.12) begins with private and public sector investment contributions at 2023 levels—for example, in advanced economies, the private sector accounted for 76% of climate change mitigation investments, while the public sector contributed 24%. Greenfield FDI is modelled to triple as a share of the baseline private sector investment contribution. In advanced economies, this means greenfield FDI represents 38.1% of the private sector’s baseline share, which constitutes 76% of the total annual investment requirements of advanced economies under the IEA NZE scenario. However, when the private sector steps in to compensate for the public sector’s 24% share of annual investment requirements after debt-to-GDP limits are reached, this does not trigger a proportional increase in greenfield FDI.
The CMS models a gradual alignment of the capital structure in EMDEs other than China with that of advanced economies by the end of 2050. The convergence is modelled using a logarithmic trajectory. By 2035, 70% of the adjustment is achieved, reflecting an accelerated initial shift that slows as it approaches equilibrium.
Estimation of future bond and equity markets
The projection of energy bond and equity markets takes advantage of the basic accounting identity of equating total assets with total liabilities plus equity and uses the capital structure data presented in “Financing sources of recent investments in the energy sector” section.
Furthermore, the analysis uses the total asset and non-current asset base, and depreciation in the energy sector as of December 2023. These figures result from aggregating firm-level data of all listed companies in the energy sector as defined above.
The analysis then incorporates total future private sector energy investments based on the IEA NZE pathway in the different scenario projections, increasing the asset base while assuming a constant depreciation rate relative to non-current assets. The resulting increase in the total asset base is then translated into financing instruments based on the shares presented in “Financing sources of recent investments in the energy sector” section (following the methodology in panel B of Figure 4.5).
The starting points for bonds and listed equity are the total outstanding bonds in the energy sector and the total market capitalisation as of December 2023. As future investments exceed depreciation, total energy assets increase and require a corresponding increase in their financing instruments. The analysis of capital market data is sourced from LSEG.
IEA data
The analysis draws on proprietary data from the IEA, reflecting its most recent updates and adjustments. As a result, the data may differ slightly from figures presented in earlier IEA publications.
The IEA reports average annual investment requirements for achieving the NZE across distinct periods (2026–30 and 2031–35 as in prior publications, and 2036–50 based on its proprietary data) and for the regions included in this analysis.
The analysis in the section “Financing scenarios for future investments in the climate transition” draws on this data, disaggregating the period averages into annual investment requirements. For advanced economies and China, the annual investment requirements gradually increase, peaking in the 2031–35 period before declining thereafter. In contrast, EMDEs other than China reach their peak aggregate annual investment requirement in the 2036–50 period, reflecting their existing larger investment gap, as well as the IEA NZE average requirements.
The analysis in Chapter 4, draws on a range of data points from multiple sources. It incorporates climate transition investment requirements in different regions (i.e. advanced economies, EMDEs other than China, and China), cross-border investments in the form of greenfield FDI, international development finance, as well as capital structure data of the corporate energy sector. Additionally, it integrates macro-economic indicators such as GDP, GDP growth, and public-sector debt-to-GDP. These data come from diverse data sources, notably the OECD and, IMF, IEA, FT fDi Markets, and LSEG. While data sources may vary in definitions and classifications, selections and adjustments are made where possible to enhance comparability and ensure consistency in the analysis. This section clarifies the alignment and reconciliation of country classifications across data sources.
The section “Past and future investments in the climate transition” follows the country classification set out in the World Energy Outlook 2024 when presenting IEA data. This classification includes all OECD countries as advanced economies, diverging from the IMF's methodology, which categorises seven OECD member countries as EMDEs—namely, Chile, Colombia, Costa Rica and Mexico in Latin America, and Hungary, Poland and Türkiye in Europe.
The section “Financing sources of recent investments in the energy sector” follows the IMF’s 2024 World Economic Outlook Database (IMF, 2024[38]) country groupings when presenting analysis on capital structure, development finance, and greenfield FDI data .
The scenario analysis in section “Financing scenarios for future investments in the climate transition” aims to quantify the scale of any investment gaps, potential funding sources for investments, and assesses the necessary bond market development while considering also cross-border investments from advanced economies to EMDEs other than China. Accordingly, the analysis reconciles the IEA’s classification—the only one meaningfully diverging from the IMF’s country grouping—to the extent possible with the classifications used for greenfield FDI, development finance, capital structure, and macro-economic data. Notably, the investment requirements for Chile, Colombia, Costa Rica and Mexico are aggregated to the investment requirements of the grouping “EMDEs other than China”. The IEA dataset does not allow for a disaggregation of investment requirements for Hungary, Poland, and Türkiye, leading to a slight overestimation of advanced economy investment requirements, and a corresponding underestimation of the investment burden for EMDEs other than China.
The macro-economic data for advanced economies and EMDEs in the analysis follow the categorisation of the IMF, except that non-OECD advanced economies are not included. These are Andorra, Croatia, Cyprus, Hong Kong (China), Macau (China), Malta, Puerto Rico, San Marino, Singapore and Chinese Taipei. Like the IMF, the OECD develops baseline GDP growth and debt-to-GDP ratio scenarios for advanced economies, and includes Chile, Colombia, Costa Rica, Hungary, Mexico, Poland, and Türkiye as EMDEs.
Over the past five years, sustainable bonds have become a more important source of capital market financing. Globally, companies issued USD 522 billion in sustainable bonds in 2024, while the official sector issued USD 473 billion in the same year. Green bonds have been the most important type of sustainable bonds issued in 2024 with, respectively, USD 381 billion and USD 257 billion (Annex Figure 4.B.2).
In both the corporate and official sectors, Europe has been the most active region. From 2015 to 2024, 45% of the global amount issued through corporate non-financial sustainable bonds was raised by European companies. China and the United States follow with 17% and 13%, respectively. Europe also dominates the issuance of sustainable bonds by financial corporates with 54%, followed by China (15%), Asia excl. China and Japan (10%) and the United States (7%) (Annex Figure 4.B.1, Panel A).
In the official sector, sustainable bonds issued by central governments have been mainly issued by European countries (65% of global issuance by central governments in 2015-24), followed by Latin American governments (15%). Issuance by agencies and local governments is also dominated by European issuers (62% of the global amount), followed by issuers in Asia excl. China and Japan (15%) (Annex Figure 4.B.1, Panel B).
Source: OECD Corporate Sustainability dataset, LSEG
Before 2020, most corporate sustainable bonds issued were green bonds, averaging 92% annually of all the amount issued via sustainable bonds (Annex Figure 4.B.2, Panel A). In 2020, sustainability bonds and social corporate bonds represented more than 10% each of the amount issued. In 2023 and 2024, Sustainability-Linked Bonds (SLB), sustainability bonds and social bonds averaged 9%, 10% and 8% respectively of the total amount of corporate sustainable bonds issued.
The issuance of green bonds is less prevalent in the official sector than in the corporate sector, representing 51% of the amount issued on average in the last three years. Governments and multilateral institutions have used social (22%) and sustainability (26%) bonds more frequently over the last three years (Annex Figure 4.B.2, Panel B). SLBs were issued for the first time by central governments and multilateral institutions in 2022, making up only 2% of sustainable bonds issued in the last two years in the official sector.
Source: OECD Corporate Sustainability dataset, LSEG
Sovereign sustainable bond (SSB) gross issuance reached a record USD 170 billion in 2024, against an average of USD 132 billion in 2021-23. Outstanding SSBs increased by 26% to USD 600 billion. Large SSB issuers remain advanced economies, with EMDEs accounting for around one-quarter of SSB gross borrowings and stock since 2020 (Annex Figure 4.B.3, Panels A and B).
SSB issuers increased from 56 in 2023 to 64 in 2024, with four EMDEs debuts. Romania's first SSB (HIC) was the largest EUR-denominated green bond issued by an EMDE (EUR 2 billion). Qatar (HIC) issued the first sovereign green bond from the Gulf Cooperation Council region. The debut issuance of the Dominican Republic (UMIC) achieved a 15 basis points price advantage. Honduras’ (LMIC) debut issuance was also its first on foreign markets since 2020.
The monetary tightening cycle may have impacted SSB issuance denominated in foreign currency across EMDEs. The share of SSB gross issuances denominated in foreign currency decreased 10 percentage points from 2021 to 2023, reaching 50%, before rebounding to around 70% in 2024 (Annex Figure 4.B.3, Panel C). This share is now at an all-time high for LMICs (around 63%), and close to it for HICs and UMICs, both at around 70%. LMICs have never issued foreign currency SSBs.
Chile (HIC), Mexico (UMIC) and Thailand (UMIC) have been the largest issuers in the EMDE SSB market, making up half of its stock (Annex Figure 4.B.3, Panel D). In Chile, SSBs funded half of the gross borrowings and represented 40% of debt stock in 2024. Mexico first issued SSBs in 2020 and aims to have a higher share of its debt in sustainable bonds, currently around 3%. Thailand issued the first Asian sovereign sustainability-linked bond in November 2024, and is expected to issue a new one in 2025.
SSB markets are expanding for LMICs while contracting for LICs. Nigeria was the first LMIC issuer in 2017, joined by four others in 2020 and a new one yearly until 2024, when gross issuance was a record USD 7 billion (Annex Figure 4.B.3, Panel E and F). LICs joined the market in 2020, with debut issuances by Burkina Faso, Guinea Bissau, Mali, Niger and Togo. No other countries have joined this group since then, and despite a significant increase in 2021, gross issuances were negligible in 2023-24 (Annex Figure 4.B.3, Panel E).
Source: OECD Survey on Primary Market Developments 2024, LSEG and OECD calculations.