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Turn Green into Gold 100B Fund of Industrial Bank Boosts the Pilot Zone of Green Finance Reform in Zhejiang

Industrial Bank Cooperated with First National Pilot Zones of Green Finance Reform to Achieve Another Milestone. On June 29, Industrial Bank (IB) and Zhejiang Provincial Government signed a strategical cooperation agreement regarding the commitment to providing Zhejiang Province with all kinds of green financing of RMB 100 billion in the next five years to support the construction of the pilot zones of green finance reform and innovation as well as the efforts to build a Zhejiang with beautiful landscape and inhabitation. Not long ago, IB just signed a strategic green financing cooperation agreement worth RMB 50 billion with Guizhou Province, marking the completion of strategic cooperation with two of the 5 pilot zones of green finance reform and innovation in terms of green financing. The total contractual amount reach RMB 150 billion.

Zhejiang is the birthplace of the theory of “Green Environment Generates Profit” (GEGP Theory) proposed by the Chairman Xi Jinping, a pioneering zone of green economy and one of the first national pilot zones of green finance reform and innovation that were approved recently. As China's first equator bank and the pioneer of green finance, IB has played an important role of boosting the “Five River Harnessing” program. “Resorting to IB for water harnessing” has become a consensus within Zhejiang. Both parties share the common green gene and solid cooperation basis in green finance.

According to the agreement, both parties will have all-round cooperation in the overall planning of green finance, the construction of a beautiful Zhejiang, the innovation in the green finance product system, the forming of the risk prevention system, with a focus to support the Sponge City, comprehensive management, water resource utilization and protection, the Beautiful Village initiative, the comprehensive environmental harnessing for small towns, green traveling, green manufacturing and etc. The purpose lies in the construction of a multi-layered organizational structure of green finance, a diversified product and service system of green finance and a multi-layered policy support and service system. While releasing more green loans, IB will further the innovation and implementation of green fund, green trust, green bond, green leasing and green retail products. Meanwhile, both parties will cooperate efficiently to fuel green development with green finance, jointly boost the structural reform of supply side, accelerate the structural transformation and upgrade of traditional industries, promote the development of high-end and intelligent machinery manufacturing, greatly facilitate the development of green manufacturing and green energy, speed up the “Five River Harnessing” and eco-system, thus creating a “Zhejiang Mode” featuring green development.

“The mode of green finance reform experiments should be designed in a way that highlights local features. In the eye of IB, this is also the essence of the ‘Zhejiang Mode’ of green finance, which means combining green finance with the green development, industrial upgrade and transformation and other key strategies and constructing a specific and featured pilot zone of green finance reform and innovation,” said Xue Hefeng, Vice President of IB.

On one hand, in recent years, guided by the GEGP Theory of the Chairman Xi, IB has committed to becoming the financial consultant of regional green development based on the strategy of Zhejiang that forces traditional industries to make economic transformation under the pressure of building Zhejiang into a place with beautiful landscape and inhabitation. Let’s take the example of Huzhou and Quzhou, two pilot zones of green finance reform and innovation in Zhejiang. As a member of the Green Finance Panel of the People's Bank of China, IB has actively participated in the planning and scheme design of these two places, promoted the establishment of Zhejiang Green Finance Commission and provided powerful intelligent support for Zhejiang to apply for the national pilot zone of green finance reform and innovation. On the other hand, IB has aggressively supported the major programs of Zhejiang, such as “Five River Harnessing”, “Beautiful Village Construction”, “Comprehensive Environmental Harnessing for Small Towns”, “Complete Tourism”, “Sponge City Construction”. Now IB has executed cooperation agreement of green finance with the local governments of Hangzhou, Jiaxing, Wenzhou and nearly 20 countries and districts, with the total contractual amount of RMB 200 billion. By the end of May 2017, IB has accumulatively provided RMB 100 billion of green financing within Zhejiang, with the financing balance of RMB 57.4 billion, accounting for 10% of that of the whole bank.

By relying on the collective product and service system of green finance featuring complete categories and abundant varieties, IB provides multifarious financial services for clients of energy conservation and environmental protection, covering green loans, green investment, green bond, green leasing and green industrial fund. By the end of May 2017, the green financing balance on new-type instruments of IB in Zhejiang had reached RMB 23.825 billion, accounting for 41% of green financing. The financing structure keeping turning to light asset and low risks.

Green mountains and water is not only a reflection of the Zhejiang today, but can become a cash cow for the sustainable development of Zhejiang, which IB serves for and benefits in. As the witness and participant of Zhejiang’s green finance development, IB has proved the sustainability of the business mode of green finance that “shows obligations in profits”, thus pushing forward its own transformation and upgrade. Under the difficulties and challenges faced by the banking industry of Zhejiang in recent years, the assets of green finance pay more and more attention to its “safety”. IB Hangzhou Branch, by effectively supporting the green development of local economy, has achieved the optimal allocation of asset and business structure, presenting only 0.98% of NPA.

“We will keep taking the multi-licensed advantages of IB Group to fuse credit loans, creditor’s rights, asset securization, equities, structural finance and other products, form special working groups connected to the head office and all branches, so as to offer professional and specialized services for the development of green finance in Zhejiang.” Xue Hefeng said that IB plans to offer another green financing of RMB 100 billion for Zhejiang within the next five years. Meanwhile, it will take this chance to intensify the interbank cooperation and effectively lead all the financial institutions within Zhejiang to jointly drive the construction of the green financial system, so as to provide green financial fuel for the green development of Zhejiang and turn green into gold.