Chinese companies issue first batch of carbon neutrality bonds for green growth
Published: Feb 25, 2021 06:33 PM

Aerial photo taken on Sept. 19, 2019 shows staff members examining solar panels on the rooftop of a local automobile maker in Huzhou, east China's Zhejiang Province. New energy sources including distributed photovoltaic systems and wind farms have taken increased shares in the power supply of Huzhou since the city adopted a low-carbon development plan. (Xinhua/Xu Yu)

Following the issuance of the first batch of carbon neutrality bonds in the China Interbank Bond Market recently, four state-owned energy enterprises plan to issue carbon-neutral bonds totaling more than 10 billion yuan ($1.55 billion) on Wednesday, reflecting domestic enterprises' commitment to the country's goal of seeking low-carbon development and achieving carbon neutrality by 2060.

China Energy Investment Corp is the first company that revealed carbon neutrality bond issuance plan on the Shanghai Stock Exchange. According to its prospectus posted by the exchange on Wednesday, the company aims to issue carbon-neutral bonds worth no more than 5 billion yuan, with a maturing period of three years.

The company said that it will apply no less than 70 percent of the funds raised in the building, operation and acquisition of green industrial projects designed for the purpose of reducing carbon emission, or in paying back loans for carbon neutrality projects, while the remaining fund will be used to supplement the company's cash flow.

Carbon neutrality bonds are a subcategory of green debt financing instruments on the Shanghai Stock Exchange, with projects mainly covering nuclear power, wind power, hydropower and clean energy industries so as to reduce carbon emission and promote sustainable economic growth.

On Wednesday, State Power Investment Corp, China Huaneng Group Co and China National Nuclear Corp announced to issue carbon neutrality green bonds, raising fund of 500 million yuan, 2 billion yuan and 30 billion yuan, respectively, according to their prospectus.

These enterprises' action plans came as China strives for a peak of carbon dioxide emissions by 2030 and to achieve carbon neutrality by 2060.

By the end of 2020, a total of 186 green bonds and 256 green asset-backed securities got listed on the Shanghai Stock Exchange, totaling 247 billion yuan, with fund raised mainly used for clean energy, environmental protection, pollution prevention, waste disposal as well as ecological protection to contribute to the country's green economic development, domestic news outlet Securities Times reported.

China's first batch of carbon-neutral bonds were issued in China's interbank bond market in mid-February, raising 6.4 billion yuan in total. 

China Three Gorges Corp, China Huaneng Group, State Power Investment Corp, China Southern Power Grid Co, Yalong River Hydropower Development Company and Sichuan Province Airport Group are the six issuers of the bonds.