PBOC launches green bond market
Print Edition
China’s central bank has jumped onto the conservation bandwagon, launching a green bond market yesterday to support eco-friendly projects in the country.
The People’s Bank of China said projects that fall under green bond catalog will be able to issue bonds in the market.
The bonds will have to comply with strict investment plan and information disclosure requirements, but the rates will be lower because of their higher safety requirements and supporting measures.
The first edition of the catalog listed nearly 40 kinds of projects under five categories including energy-saving, pollution prevention, resources saving and recycle, clean transportation and clean energy.
The PBOC said it will make the bonds available as collateral, simplify administrative approval procedures, champion tax breaks and subsidies, and encourage more capital flow from social security, welfare and enterprise annuity funds into the green bond market.
The PBOC hopes its latest venture will enable the green projects to secure loans, fina,ncial discount and guarantees from commercial banks.
Moody’s Investors Service welcomed the supporting measures by the central bank yesterday.
“China’s green bond market can expand more rapidly than internationally designated green bonds because of the central bank’s support and incentives announced yesterday. It will help in the form of collateral eligibility, relending and interest subsidies, which are generally not available elsewhere,” Henry Shilling, a Moody’s Senior Vice President, said yesterday.
“We expect the country to be a prominent driver of issuance over the coming years given the government’s ambitious targets on meeting renewable energy capacity.”
Data made available by Moody’s revealed that international green bond volume has been increasing at an average annual rate of 291 percent since 2011. The total issuance is estimated to reach US$90.6 billion in the past four years.
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