First Carbon-neutral Bonds Issued in China by SOEs

On February 9, five state-owned power companies and one airline company issued China’s first batch of carbon-neutral bonds on the interbank bond market under the support People’s Bank of China. China said the move is in response to its commitment of becoming carbon neutral by 2060, which is the first-ever green bond labeled “carbon neutral” in the world.

The raised fund will be used in wind power and PV projects, airport construction and water conservation.   

Bond issuers include China Three Gorges Corp, China Huaneng Group, State Power Investment Corp, China Southern Power Grid Co, Yalong River Hydropower Development Co and Sichuan Province Airport Group. The total fund to be raised is CNY 6.4 billion (USD 992 million).  

On top of the green bond, China also launched a nationwide carbond trading scheme covering 2,225 power companies in order to advocate its green finance policy and related standards.