More banks and financial institutions are expected to launch green bonds soon, and China looks set to emerge as one of the fastest growing markets for rating funds to finance low-carbon and renewable energy projects.
According to media reports, the Industrial & Commercial Bank of China (ICBC) will soon launch green bonds. Officials of the bank have, however, not announced the possible size or timing of the green bonds issue.
The ICBC has been a major lender for green projects with 702.8 billion yuan of outstanding loans. One assumes that the proceeds from the green bonds issue will be used toward renewable energy and low-carbon projects.
The Chinese central bank has set a quota system for banks and financial institutions to raise up to 300 billion yuan (over $45 billion).
Recently, the China Industrial Bank and Shanghai Pudong Development Bank raised a total of just over $3.5 billion through two separate green bond issues. The China Industrial Bank raised 10 billion Yuan ($1.52 billion) by offering investors instruments at a coupon rate of 2.95% and maturity of 3 years. Shanghai Pudong Development Bank managed to raise 20 billion Yuan ($3 billion) offering instruments at the same coupon rate and maturity duration.
The China Industrial Bank and Shanghai Pudong Development Bank have a quota of 50 billion Yuan ($7.6 billion) each.
Wind energy firm Xinjiang Goldwind Science & Technology received investment interest worth US$1.4 billion for a US$300 million bonds issue. The Agriculture Bank of China issued its first green bonds in London and raised around $1 billion, with the dual currency bonds to be listed on the London Stock Exchange.
China witnessed issuance of just over $1 billion worth of green bonds in 2015. However, global credit rating agency Moody’s expects a sharp boom in the issuance from China in 2016.
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