| HONG KONG, July 20
HONG KONG, July 20 China's first green bond has
raised $300 million after pricing last week, as the world's
largest emitter of greenhouse gases seeks new funding sources to
help raise about $1.6 trillion over five years to help fix its
China is scrambling to lift environmental standards in a
country where only eight out of 74 cities met air quality
minimum standards and only 25 percent of drinking water achieved
national quality standards, according to latest government data.
Green bonds are certified to show that funds raised will be
used for environmental projects and are a popular tool for
socially responsible investment. For issuers, they can offer a
new investor base to raise funds.
"We see activity around green bonds in a number of different
places, but signals out of China are very strong," said New
York-based Manuel Lewin, Head of Responsible Investment for
Zurich Insurance Group.
Wind energy firm Xinjiang Goldwind Science & Technology
said it will use proceeds from the first
green bond issue for general working capital and refinancing
purposes for its group companies. The $300 million deal received
orders of $1.4 billion.
China's debut green bond comes at a time when the country is
opening up its debt markets to global investors. Earlier this
month, China relaxed rules for some long-term foreign investors
to participate in its interbank market.
A taskforce under the leadership of the People's Bank of
China has recommended setting up a green financial system to
help contain the cost of pollution.
Currently about 70 percent of the $200 billion China spends
each year on environment-related projects come from loans made
mainly by state-owned banks, some with implicit government
backing. Analysts say, private sector investment is needed to
meet China's new ambitious targets.
The task force estimates that achieving environmental goals
under the five-year plan over 2016-2020 would require an annual
investment of at least $320 billion.
"From an environmental point of view, China would be able to
make very good use of green bonds as a financial tool," said
Beijia Ma, London-based BofA Merrill Lynch strategist.
Global issuance of green bonds has flattened after tripling
last year. Investors see more issuance in China, although it was
too early to predict the pace of growth.
"The emergence of green bonds in China will initially not
raise extra money but different money," said Simon Zadek, Senior
Fellow at the Global Green Growth Institute.
(Reporting by Umesh Desai; Editing by Denny Thomas and Richard