Recently, Bank Of Chengdu Co.Ltd(601838) ( Bank Of Chengdu Co.Ltd(601838) . SH) issued 3 billion yuan of green financial bonds, which is the first green financial bond dedicated to helping achieve the goal of “double carbon” in Sichuan after the goal of “carbon peak and carbon neutralization” was put forward. The coupon rate of the bond is 2.95% Bank Of Chengdu Co.Ltd(601838) a person told the Huaxia times on March 16 that the funds raised by this bond will be used to issue green project loans.
Green financial bond is an important green financial product. It is a kind of special bond to raise funds to support green industrial projects, which is conducive to increasing the effective supply of medium and long-term green credit. Since the “double carbon” target was put forward, the issuance of green financial bonds has increased significantly, exceeding 30 billion yuan last year. A number of urban commercial banks and agricultural businesses have joined the ranks of issuing green financial bonds. In addition to Bank Of Chengdu Co.Ltd(601838) , recently, Bank of Guizhou also announced that it plans to issue green financial bonds in 2022.
3 billion yuan of green financial bonds
On March 11, Bank Of Chengdu Co.Ltd(601838) announced that Bank Of Chengdu Co.Ltd(601838) issued 2022 green financial bonds on March 10. The bond is a three-year fixed interest rate bond with a value date of March 14. The total planned and actual issuance amount is 3 billion yuan. The coupon rate at the time of issuance is 2.95%. The lead lead underwriter is Guotai Junan Securities Co.Ltd(601211) securitiesp align=”center” style=”text-align:center;”> (the form comes from the announcement on the issuance of green financial bonds in Bank Of Chengdu Co.Ltd(601838) 2022)
Bank Of Chengdu Co.Ltd(601838) a person told the Huaxia times that the funds raised by this bond will be used for green projects such as garbage power generation, sewage treatment, urban and rural water supply, purchase of new energy buses, utilization of solid waste and so on Bank Of Chengdu Co.Ltd(601838) green financial bonds are invested in green projects according to the green industry guidance catalogue (2019 Edition) jointly issued by seven ministries and commissions including the national development and Reform Commission, the Ministry of industry and information technology, the Ministry of natural resources, the Ministry of ecological environment, the Ministry of housing and urban rural development, the people’s Bank of China and the national energy administration The catalogue of green bond support projects (2021 version) and other relevant provisions jointly issued by the three ministries and commissions of the CSRC are screened in combination with the delivery time and delivery cycle of the loan plan.
According to the catalogue of green bond support projects (2021 Edition), green bonds mainly support energy conservation and environmental protection industry, cleaner production industry, clean energy industry, ecological environment industry, green upgrading of infrastructure, green services and other industries.
Bank Of Chengdu Co.Ltd(601838) was established in December 1996. It is a local joint-stock commercial bank with state-owned equity and diversified equity. Bank Of Chengdu Co.Ltd(601838) also introduced Malaysia Fenglong bank as an overseas strategic investment partner. On January 31, 2018, Bank Of Chengdu Co.Ltd(601838) was listed on the Shanghai Stock Exchange, becoming the first listed bank in Sichuan Province and the eighth A-share listed city commercial bank in China.
The above Bank Of Chengdu Co.Ltd(601838) person told Huaxia times: “we attach great importance to the construction of corporate social responsibility. Under the guidance of the ‘double carbon’ goal, we clearly support green, low-carbon and circular economy, integrate the concept of green credit into core values, and cultivate and advocate green credit culture.” According to the requirements of the energy conservation and emission reduction work plan of the State Council and other documents, Bank Of Chengdu Co.Ltd(601838) successively issued the guidance on the development of green credit, the notice of Bank Of Chengdu Co.Ltd(601838) on strengthening the examination of environmental protection qualification of enterprises in credit examination and approval and other documents to support the development of green credit business.
According to the 2020 social responsibility report, by the end of 2020, Bank Of Chengdu Co.Ltd(601838) green credit balance was 4.437 billion yuan, an increase of 18.61% over the beginning of the year. In order to support customers’ green development, by the end of 2020, Bank Of Chengdu Co.Ltd(601838) has provided customers with more than 1.6 billion yuan of loans for technological transformation.
The reporter of Huaxia times learned from Bank Of Chengdu Co.Ltd(601838) that up to now, the bank has established a relatively perfect organizational structure of green credit work and set up a cross line environmental and social risk management team to ensure the orderly development of green credit related work. In accordance with national environmental protection laws and regulations, industrial policies, industry access policies and other provisions, the bank established and improved environmental and social risk management policies, systems and processes, and defined the direction and key areas of green credit support. In addition, Bank Of Chengdu Co.Ltd(601838) has also realized the process management of green credit, optimized the credit management system, realized the automatic push of public opinion information such as environmental protection punishment, and refined the relevant requirements of green credit to the specific processes and links of “three checks” of credit.
At present, Bank Of Chengdu Co.Ltd(601838) has not officially released the annual report of 2021, but the performance forecast shows that Bank Of Chengdu Co.Ltd(601838) expects the net profit attributable to shareholders of Listed Companies in 2021 to increase by 1.085 billion yuan to 1.507 billion yuan, an increase of 18% to 25% year-on-year.
What are the advantages of green financial bonds
In terms of supporting green industries, banks can choose not only green bonds, but also green credit, carbon neutral structured deposits and so on. Green bonds and green credit are important products of green finance.
In December 2015, the people’s Bank of China issued announcement No. 39 of 2015 to launch green financial bonds in the inter-bank bond market. Green financial bonds are a kind of special bonds that raise funds to support green industrial projects. The launch of green financial bonds has created new financing channels for financial institutions to raise funds through the bond market to support green industrial projects such as environmental protection, energy conservation, clean energy and clean transportation. It is conducive to increasing the effective supply of green credit, especially medium and long-term green credit. It is an important measure to build a green financial system.
According to the central bank’s Announcement No. 39 of 2015, the funds raised by green financial bonds can only be used to support green industry projects. The issuer may screen projects according to the catalogue of green bond support projects attached to the announcement, or refer to other green project definition standards. The issuer shall, in accordance with the use plan of the raised funds, invest the funds in the green industry projects as soon as possible.
Compared with ordinary financial bonds, the information disclosure requirements of green financial bonds are higher. The issuer should not only fully disclose the types of green industrial projects to be invested, project screening standards, project decision-making procedures, environmental benefit objectives, as well as the use plan and management system of bond funds in the prospectus, During the duration of the bonds, the use of the raised funds shall also be publicly disclosed on a regular basis.
Since 2015, especially since the “double carbon” target was put forward, green financial debt has become an important financial tool widely used by banks. In 2021, the total scale of green financial bonds issued by banks exceeded 30 billion yuan, far exceeding the level in 2020.
Among the subjects issuing green financial bonds, there are not only large banks, but also urban commercial banks and rural commercial banks.
However, some insiders pointed out that the green financial business of some banks is not mature, and the banks do not have a deep understanding of green industries and green enterprises, which limits the development of their green financial debt business.
On March 14, ye Daqing, co-founder, chairman and CEO of rong360, pointed out to the reporter of Huaxia times that local small and medium-sized banks have encountered some problems in carrying out green financial business, the most prominent of which is the difficulty of risk control. Green projects and enterprises with “difficult financing” have the problems of small scale, large number and low enterprise credit rating. If local small and medium-sized banks do not carry out digital transformation, it is difficult to form effective support for these green projects and enterprises under the traditional risk control mode. Ye Daqing said that as an expert in bank digital transformation services, rong360 can help banks design risk control brain decision engine and help the development of green finance through algorithms, modeling tools, data management tools, combined with risk control technology, supplemented by professional risk decision-making.
According to incomplete statistics by the reporter of Huaxia times, in addition to Bank Of Chengdu Co.Ltd(601838) , banks that have recently issued green financial bonds include Bank Of China Limited(601988) , Bank Of Nanjing Co.Ltd(601009) , Ma’anshan farmers and businessmen, etc. On March 4 this year, Bank of Guizhou issued the prospectus for green financial bonds in 2022, which plans to issue green financial bonds of Bank of Guizhou in 2022 in the national inter-bank bond market. The total amount of bonds planned to be issued this time is 8 billion yuan, and the first issue has been completed by 5 billion yuan. This issue of bonds is the second issue, and the scale of this issue of bonds is 3 billion yuan.
Local small and medium-sized banks also have unique advantages in carrying out green financial business. Ye Daqing believes that their biggest advantage is “local” characteristics. As local banks, local small and medium-sized banks are often deeply bound with local governments, understand the local green financial needs and layout, and can develop corresponding products according to local green projects to support local green industries, so as to further realize their own business optimization and development.
