Development banks tipped to give China’s green bond boom a further boost
Green Finance Committee estimates mainland needs to spend at least 2 trillion yuan a year on energy saving and pollution reduction projects
The boom in mainland China’s nascent green bond market is set to continue this year after deal volume ballooned in the first quarter, with mainland and multilateral development banks tipped to take the torch after a spate of jumbo issuances by commercial banks early in the year.
The boom will help diversify financing channels for companies and government entities seeking to fund projects that would reduce emissions of harmful gases and water pollution, enhance energy efficiency and conserve water.
The mainland needs at least 2 trillion yuan (HK$2.39 trillion) annually to fund energy-saving and carbon emission reduction projects and to deal with its pollution problems, according to the Green Finance Committee, a think tank tasked by the People’s Bank of China (PBOC) with estimating the cost.
“Besides commercial banks, a number of development banks and supranational banks operating in China are seriously looking at the green bond as an important part of their fund-raising programme,” Frank Kwong, head of primary markets, Asia-Pacific, at French bank BNP Paribas said.
Given China’s size and its ambitions in the field of green finance, China is a top candidate for issuing a sovereign green bond
He said BNP was working on a few green bond issuance transactions with clients which could be executed in the next few months.