The highly anticipated green finance bonds have finally realized. Being an expert in environmental finance, IB has no doubt become one of the first banks allowed to issue.
On the evening of January 21, IB announced that the People's Bank of China had approved it for offering no more than 50 billion yuan of green financial bonds in national inter-bank bond market publicly, to raise funds earmarked for green industry project loans. It is understood that, in November 2015, IB's application for issuing special financial bonds of green credit obtained the approval from CBRC as the first one.
Green finance bonds refer to securities issued according to law by corporate financial institutions to raise funds for green industries and repay principals and interests according to the agreement. Originated in the early 21st century, it is a new bond product in the international bond market accompanied with the ongoing concerns over climate change and the environment by worldwide investors. As early as 2013, Gao Jianping, a member of the CPPCC National Committee and the Chairman of Industrial Bank, during the NPC and CPPCC sessions, actively proposed to release relevant systems of green financial bonds, and promote the development of energy-saving and environmental protection industry in China.
According to the estimates by Industrial Bank, in the next five years, it will give rise to a financing scale of green bonds amounting to 300 billion yuan per year, marking a huge market potential. "Issuing green financial bonds is in favor of China's commercial banks to enhance the long-term ability to serve green credit, and will promote commercial banks to participate in the international market and improve the level of internationalization of the RMB.” said Fang Zhiyong, the general manager of IB Environmental Finance Department.
After many years of accumulation, the Industrial Bank has formed a green financial products and services system covering the financing services of energy conservation and pollution reduction, emissions rights trading services, and personal low-carbon financial services, realized full coverage from enterprises to individuals.
“In all aspects of green finance such as product innovation, professional services, institutional mechanisms, environmental and social risk management, we are fully prepared.” According to Chen Yaqin, an expert at IB Environmental Finance Department, to ensure the preparatory work on the issuance, use and management of the green financial bonds, in 2014, the Industrial Bank issued a "Management Approach of Funds Raised via Green Financial Bonds". In December 2015, the central bank issued advices to encourage all types of financial institutions and securities investment funds and other investment plans, social security funds, corporate annuity and social welfare funds and other institutional investors to invest in green financial bonds, and has further defined the investment standard, the operation management process and other specific implementation details.
“In the course of the follow-up issuing and using, our bank will strictly comply with PBOC and CBRC's relevant requirements, carry out the work on project screening, evaluation, ledger management, information disclosure and monitoring and assessment, and ensure that funds raised are used for earmarked purposes.” said Fang Zhiyong.
Data show that as of the end of 2015, the Industrial Bank has provided over 6,000 companies with green financing of more than 800 billion yuan, and the balance reached 394.2 billion yuan, covering low-carbon economy, circular economy and ecological economics.