Sustainable finance is transforming. Emerging and frontier markets across Latin America, Central Asia, Türkiye, and Africa are rapidly expanding their green, blue, and broader ESG bond offerings at different stages of maturity, collectively steering global capital markets toward more climate-aligned and socially inclusive outcomes.
Green bonds remain the dominant instrument, widely used to finance renewable energy, green buildings, energy efficiency, and clean mobility projects. Blue bonds funding ocean and water-related investments are rising from a niche asset class into a powerful tool for coastal resilience. Meanwhile, broader ESG structures such as social bonds, sustainability bonds, and sustainability-linked bonds (SLBs) are taking hold as countries integrate performance-based incentives and align with global standards.
Together, these dynamics illustrate an accelerating shift towards outcomes-based finance. Below is a regional deep dive into how the ESG debt landscape is evolving and where it is heading next.
Latin America and the Caribbean (LAC) has emerged as one of the fastest-growing ESG bond markets in the world. Between 2014 and 2023, the region issued roughly USD 131 billion in GSSS (green, social, sustainability and sustainability-linked) instruments, with the share of ESG-labelled international issuance jumping from just 9% in 2020 to almost 35% in 2023.
Sovereigns have catalysed the market’s maturity. Countries like Chile and Uruguay have issued sophisticated sustainability-linked bonds tied to KPIs such as emissions reduction and renewable energy penetration. By 2023, GSSS instruments accounted for nearly half of all sovereign issuance in the region well above the global emerging-market average.
SLBs became the single largest segment of GSSS issuance in Latin America in 2023, representing around 36% of the market. This signals a notable shift from traditional use-of-proceeds bonds to structures aligned with measurable climate and social outcomes particularly attractive where project pipelines may be constrained, but where broader sustainability commitments remain strong.
Multilateral institutions have played a decisive role in strengthening LAC’s green bond ecosystem. From technical assistance programmes to taxonomy development, these efforts are creating a more standardised, transparent market critical for sustaining investor confidence.
Expect deeper market diversification and more blue bonds as coastal economies prioritise ocean protection. Transition financing particularly for carbon-intensive sectors will also grow as countries balance development goals with decarbonisation pathways.
Türkiye has positioned itself as a leading sustainable finance destination across the Middle East, Central Asia, and the broader CEE region. The country’s journey began in 2016 with a landmark USD 300 million sustainable bond issued by the Industrial Development Bank of Turkey, and the market has expanded steadily since.
Turkish issuers increasingly adopt ICMA-aligned Sustainable Finance Frameworks with robust second-party opinions. Proceeds typically support renewable energy, energy efficiency, green buildings, and climate adaptation sectors that match the region’s high infrastructure investment needs.
Türkiye’s sustainable finance networks supported by multilateral players such as the EBRD and AIIBare radiating outward, with spillover effects increasingly visible in Central Asia. Although ESG debt markets in Kazakhstan, Uzbekistan, and others remain nascent, activity is rising as development institutions deploy sustainability bonds, guarantees, and blended finance instruments.
As local regulation evolves and investor familiarity grows, Central Asia is likely to shift from ad-hoc sustainable transactions toward stable green and sustainability-linked issuance programmes. Türkiye will remain influential in shaping this transition, acting as a bridge between global capital and regional sustainability needs.
Africa’s ESG debt marketthough still smallhas shown extraordinary momentum. Green bond issuance rose by around 125% in 2023, reaching approximately USD 1.4 billion across more than 20 instruments issued by 2024.
Seychelles set a global precedent with the world’s first sovereign blue bond, dedicated to marine conservation and sustainable fisheries. Gabon followed with an innovative debt-for-nature blue bond, combining conservation financing with debt restructuring.
These deals demonstrate how nature-linked and ocean-focused instruments can unlock value for countries rich in biodiversity but constrained by traditional financing channels.
Countries such as Mauritius, Morocco, Nigeria, Kenya, and South Africa are progressing quickly, with sustainable bond guidelines, listing platforms, and regulatory reforms designed to mainstream ESG instruments. Cabo Verde’s Blu-X platform is a compelling example of how digital listing ecosystems can increase visibility and attract global investors.
Côte d’Ivoire’s USD 1.1 billion sustainability bond in 2024 stands out as one of the region’s largest sovereign ESG issues, signalling strong demand for well-structured, standards-aligned instruments.
The future hinges on deepening local capital markets, enhancing liquidity, and reducing issuance costs. Development finance institutions including the African Development Bank are scaling up technical assistance, green bond frameworks, and dedicated investment vehicles to crowd in private capital.
As this ecosystem matures, Africa is poised to transition from sporadic ESG transactions to regular green and sustainability-linked programmes that support climate adaptation, sustainable agriculture, water resilience, and inclusive infrastructure.
Despite differing levels of maturity, the three regions share converging themes shaping the next decade of sustainable finance:
Markets are shifting from simple green bonds to a richer mix of sustainability, social and SLBs, enabling more flexible funding structures and outcome-based incentives.
Ocean protection, coastal resilience, and debt-for-nature swaps are emerging as powerful tools for countries with significant marine resources or biodiversity assets.
Across all regions, development finance institutions are anchoring issuances, offering guarantees, supporting framework development, and enabling regulatory harmonisation essential ingredients for scaling ESG capital.
Adoption of taxonomies, robust disclosure, and global alignment with ICMA principles is helping attract institutional investors seeking credible, transparent, high-impact instruments.
Green and blue bonds will continue to lead the narrative in emerging markets but the real transformation lies in expanding the toolkit to include performance-linked financing, nature-based solutions, and transition instruments.
As countries strengthen regulatory ecosystems and broaden their sustainable project pipelines, ESG debt will play a pivotal role in funding climate adaptation, resilience, and inclusive development. The coming years will not just see more issuance they will see more sophisticated, impactful structures that bring global capital closer to real-world sustainability results.
At Global Banking and Markets, we help issuers and investors navigate the rapidly evolving world of sustainable finance. Whether you are seeking to structure a green, blue, sustainability, or sustainability-linked bond or exploring more innovative solutions such as nature-linked instruments or transition financingour expertise, global distribution capabilities, and ESG advisory strength ensure best-in-class execution.
From framework development and second-party opinion coordination, to pricing strategy and investor engagement, we partner with sovereigns, financial institutions, and corporates to deliver transactions that meet the highest international standards while unlocking meaningful environmental and social impact.
If you’re looking to lead in the future of ESG debt markets, Global Banking and Markets is ready to support your journey.