Posted on: 25/09/2018
Bank loans for green infrastructure projects have a lower default rate, according to a report by credit ratings agency Moody’s.
Green projects have a ten-year default rate of 5.7%, compared to 8.5% for non-green projects.
Kathrin Heitmann, a vice president and senior analyst at Moody's, explained: “Our analysis of thousands of project finance bank loans examined various industry sectors that align with our definition of infrastructure.
“We further split the data into green and non-green projects and found significant distinctions related to default and recovery rates.”
Advanced and emerging economies
Default rates on loans for green projects were lower in advanced economies, and sat at the same rate as those for non-green loans in emerging markets and developing economies.
The trend was found to be true across infrastructure and power projects.
Moody’s report studied 5,859 infrastructure projects.