Chinese non-financial firms allowed to issue green bonds

The People’s Bank of China Thursday expanded the ways finance environment-friendly projects by allowing non-financial firms to issue green bonds, reported The Times of India.

People's Bank of China

People’s Bank of China

Earlier this month, the central bank allowed policy banks, commercial banks and other financial institutions to issue green bonds in its interbank market.

“First we introduced financial green bonds and the next step will be corporate green bonds,” Cao Yuanyuan, director of the bond issue management department of the PBOC, told a news conference. “We will see the first batch of green bonds issued by financial institutions coming soon.”

Some foreign institutions have also shown an interest in issuing onshore green panda bonds, Cao also told the conference.

China is trying to help. Regulators hope to contain the cost of pollution by developing a green financial system, while related companies mainly rely on bank loans to support their projects.

“The bond issues will ease the problem of maturity mismatches in the banking system, helping banks issue more medium-and long-term loans to green projects,” Ma Jun, PBOC’s chief economist, told the same briefing.

The size of China’s green bond market is expected to be nearly 300 billion yuan ($46.31 billion) annually, analysts said.

The Agricultural Bank of China, the country’s third largest listed lender, issued the country’s first green bond in October in London.



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