Jan 13 Reuters Sustainable funding held up in Asia during a rough patch globally last year thanks to strong local demand, and bankers say a pipeline of decarbonisation projects is likely to keep deals flowing in 2023.

Issuance of bonds tied to environmental, social and governance ESG themes grossed 142 billion in Asia Pacific last year, barely below the record 144 billion of 2021, according to data from Refinitiv.

That contrasted with declines of 30 or more in total issuance in Europe and in the United States.

Participants say the 2022 issuance in Asia was fuelled on the supply side by the gargantuan task of greening Asia39;s energy grid and by low yuan interest rates in top issuer China, where investment from domestic institutions supported prices.

Increased issuance in domestic currencies has compensated for the fall in the crossborder market, which was similar to the global picture, said Atul Jhavar, head of sustainable capital markets for the AsiaPacific at Barclays.

We39;ve seen a bunch of ESGlabelled issues, especially in currencies like the yuan.

Chinese entities issued 59.3 of the ESG bonds in the AsiaPacific region in 2022, with total proceeds totaling 84 billion, up about 6 from 80 billion in 2021. The number of issuers rose slightly, to 281 from 279.

The interest rate backdrop for issuers was favourable in China. Interest rates there remained lower and steadier than in the inflationhit West. Threeyear government bonds yield 2.5 in China against 3.9 in…