Six Chinese state-owned utilities and infrastructure companies issued the nation’s first batch of carbon-neutral bonds totaling RMB 6.4 billion ($992 million) as part of China’s efforts to achieve President Xi Jinping’s pledge to become carbon neutral by 2060, reported Caixin.
Carbon neutral bonds, as a type of green bonds, require assessment and certification by third-party professional institutions to provide quantitative measurement of environmental benefits such as reduction of carbon dioxide emissions.
Proceeds from the borrowings will be used to fund green projects to reduce such greenhouse gas emissions. The projects mainly include photovoltaics, wind power, hydropower and green buildings, reported Caixin.
In the current tight liquidity environment, issuers of the carbon-neutral bonds obtained coupon interest rates that were better than expected. The bonds are sought by investors such as insurers, banks, wealth management firms, funds and securities companies, said Hu Kun, general manager of the investment banking and asset management department at Bank of China, one of the underwriters.