Aerial photo taken on Aug. 17, 2020 shows a photovoltaic power station at the green industrial development park in the Tibetan Autonomous Prefecture of Hainan, northwest China's Qinghai Province. (Xinhua/Zhang Long)
BEIJING, Feb. 7 (Xinhua) -- China's primary green bond market boomed in January, with monthly issues of 56 batches of green bonds raising in total 88.063 billion yuan fund, significantly higher than the 6.73 billion yuan in the comparable period of 2021, reported Shanghai Securities News citing data with Wind Information Monday.
After excluding green local government bonds and green financial bonds, there were 49 batches of green debenture issues in January, much more than the 14 batches and nine batches in the same months of 2020 and 2021.
As a direct financing vehicle, the ballooning green bond issuance expanded the size of bond market and in the meantime encouraged more enterprises to participate in green financing via bond market.
By now, green bond, one of the major vehicles for green financing, has become a star product on China's bond market under the goals of carbon peaking and carbon neutrality, said Fan Wei, general manager of fixed-income finance headquarters of Shenwan Hongyuan Securities.
As proceeds of green bonds are required to support green industries, green bonds issuance is helpful to carbon emission reduction and improvement of related technologies and provides companies with wider access to green economy, held Ding Xiaofeng, chief fixed-income analyst with China Fortune Securities.
Generally, green bonds enjoy lower yields at issue than other bonds of the same ratings and terms, good for issuers to save costs and take part in realizing the goals of carbon peaking and carbon neutrality, added Ding.
Since 2021, new green bond products such as carbon neutrality bond, sustainable development-related bond, and green financial bonds of varied themes kept popping up in China.
Under such circumstances, Shanghai Stock Exchange, Shenzhen Stock Exchange and National Association of Financial Market Institutional Investors, a self-regulation organization aiming to propel development of China's OTC financial market, all established green channels and unified labels for green bond to foster green bond market.
Previously on January 21, an implementation plan for boosting green consumption released by Chinese regulators including the National Development and Reform Commission, the country's top economic planner, proposed to boost green bond issues in a stable pace and encourage financial institutions and financial companies to issue green bonds.
In 2022, China's green bond market may expand modestly, according to CSCI Pengyuan Credit Rating Limited.
As the rating firm held, energy consumption transformation, industrial structural reform and green and low-carbon development of key industries involve huge demand for fund thus green finance still has space for development. Meanwhile, related policies such as the unification of green bond-backed projects and inclusion of green bond into the green finance appraisal system of banking institutions both cement the basis of green bond market expansion.
But the growth of green bond issues in 2022 may be limited if net annual financing this year do not change much from the average data in the past six years except 2020, predicted CSCI Pengyuan. Since 2016 and excluding 2020, net financing by green bonds stayed generally between 200-250 billion yuan and green bonds to be repaid in 2022 is forecasted to shrink 22.88 percent than 2021.
Currently, the proportion of green bonds in China's bond market remains still small, indicating enormous growth room, said Ding, adding that alongside the progresses of capital market in facilitating carbon peaking and carbon neutrality, green bond market will embrace a golden period of development. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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