Chinese Development Bank issues RMB20bn green bond

Out-Law News | 24 Mar 2021 | 2:19 am |

The Chinese Development Bank has issued its first green bond, a RMB20 billion ($3.07bn) bond aimed at raising funds for renewables projects.

It is a three-year bond and was offered to global investors via the bond connect investment platform that was launched in 2017. 

It is the first carbon neutral green bond certified by the World Bank’s Climate Bonds Initiative (CBI) and understood to be the largest issued green bond for addressing carbon peaking and carbon neutrality targets.

The bond will be added to the Carbon Neutral Bond Index of Shanghai Clearing House.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “The scale of China’s decarbonisation program is huge and the capital required will be similarly huge. The scale of this bond reflects this. We can anticipate that further bond issues will be required in order to meet the carbon peaking and carbon neutrality timelines. Advancements in the nation’s green taxonomy including greater convergence globally will only help to progress these investments.”

China's first batch of six carbon neutrality green bonds was issued in February. All of the bonds are mid to long-term notes with a term of at least two years. The total financing of the six bonds was RMB6.4bn, most of which was used to fund wind power, hydropower, photovoltaic and green construction projects.

It is reported that China’s central bank would prioritise green finance in the coming year and during the 14th five-year plan period for helping to achieve China’s target to reach carbon neutrality by 2060.