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Khaleej Times
02-04-2025
- Business
- Khaleej Times
China sees bumper demand for debut international green bond
China saw strong demand for its debut sovereign green bond on Wednesday, with investors saying it was a welcome sign for the sustainable debt market as the United States backpedals from its climate commitments. Bankers selling the modestly sized 6 billion yuan ($825 million) bond, which is to be listed in London, told potential buyers that demand for the dual three- and five-year tranche bond had surged to 47 billion yuan ($6.47 billion). The final price dropped to 1.88% on the three-year tranche, having initially been set at 2.3%, and to 1.93% from 2.35% on the five-year tranche. Green bonds are intended to finance investments needed to tackle or adapt to climate change and to boost sustainable economic development. The Chinese Finance Ministry's director general, Yu Hong, and his deputy director general, Xing Chaohong, met with investors in London on Tuesday and outlined a list of projects the money could be spent on, ranging from electric car charging and national parks to hydroelectric projects. "It is a relatively powerful signal, as it comes at a time when the U.S. is pulling back from climate commitments," Nicolas Jaquier, a sustainable debt manager at investment firm Ninety One, said. "It is a sign that China is looking to step up," he added. "It's also a good sign for other smaller emerging markets who might have been a bit tentative, as it shows that a big power is taking climate finance seriously." China's Finance Ministry could not be immediately reached for comment on the result of the bond sale outside of regular Beijing business hours. It had flagged its plans earlier in the year after British finance minister Rachel Reeves met Vice Premier He Lifeng in Beijing to discuss "pragmatic cooperation" on financial services, trade, investment and climate issues. China is the world's largest producer of climate-warming greenhouse gases, but has said it wants to bring its carbon dioxide emissions to a peak before 2030 and become carbon-neutral by 2060. Although the sovereign green bond is an international first for China, its companies have been highly active in the market. Moody's estimates that almost $410 billion of green bonds had been issued by Chinese companies by the end of last year. The near $50-billion-worth sold last year accounted for 8% share of global green bond issuance in an overall market which has ballooned to over $3 trillion in recent years. The finance ministry published a green bond "framework" in February which described the government's bond plans as an effort to "attract international funds to support domestic green and low-carbon development."
Reuters
01-04-2025
- Business
- Reuters
China's to sell first global green sovereign bond on Wednesday
LONDON, April 1 (Reuters) - China is set to finalise its long-awaited debut global green sovereign bond on Wednesday in what is expected to be the first in a series of sales that will expand its footprint in the market at a pivotal time. Having signalled it was ready last month, top Chinese finance ministry officials laid out the details at a meeting with investors in London on Tuesday, where the 6 billion yuan ($825 million) bond is set to be issued on the London Stock Exchange. The green bond market has ballooned to be worth roughly $3 trillion in recent years. China's firms, including state-run ones, have contributed significantly to that growth, but international investors have long been waiting for the government to make its move for years. Chinese Finance Ministry's Director General Yu Hong and his Deputy Director General Xing Chaohong outlined that it would come in two parts - one with a 3-year maturity - or end date - and the second with 5-year maturity. Both will have fixed interest rates. They are expected to be sub 2% although it will depend on demand during the formal sale process which is being overseen by no fewer than eight banks from both China and Europe. A Chinese global bond - one issued in one of the main international finance centres - has long been anticipated given the country's size. China's plan finally emerged earlier this year after British Finance Minister Rachel Reeves met China's Vice Premier He Lifeng in Beijing to discuss "pragmatic co-operation" on financial services, trade, investment and climate issues. China is the world's largest producer of climate-warming greenhouse gases, but has said it wants to bring its carbon dioxide emissions to a peak before 2030 and become carbon neutral by 2060. In February, the finance ministry published its green bond framework, calling it an effort to "attract international funds to support domestic green and low-carbon development." It flagged Climate Change Mitigation, Climate Change Adaptation, Natural Resource Conservation, Pollution Prevention and Control and Biodiversity Conservation as its five key priorities. One investor who attended Tuesday's meeting said some of the details on what exactly the money raised would be used for included the country's electric vehicle charging network and its national parks. ($1 = 7.2697 Chinese yuan renminbi)
