China’s green bond issuance increased by over 130 billion yuan in first half of 2019

China’s green bond market grew rapidly in the first half of 2019 and a total of 84 issuance of green bonds were issued, with an scale of 131.6 billion yuan, a substantial increase compared with the level of the same period in 2018 (48 issuances with 84.4 billion yuan), according to a latest related report of China Lianhe Credit Rating Co.,Ltd..

China’s green bond market grew rapidly in the first half of 2019 and a total of 84 issuance of green bonds were issued, with an scale of 131.6 billion yuan, a substantial increase compared with the level of the same period in 2018 (48 issuances with 84.4 billion yuan), according to a latest related report of China Lianhe Credit Rating Co.,Ltd..

At the same time, in 2019, the variety of green bonds was more diversified, with local government green municipal special bonds added, and many places in the western region issued green bonds for the first time, and the coverage will be further expanded.

It is understood that the number of issuances and the size of green bonds in 2019 account for 1.32% and 1.65% of the total number of issuance in the bond market, respectively, which is much higher than the level of the same period in 2018 (0.9% of the number of issues and 0.78% of the size of issuances).

The new issuance of green bonds in 2019 shows a more obvious change compared with the same period in 2018.

On the one hand, the first half of 2019 ended the situation that the issuance scale of green bonds repeatedly ranked first, and the issuance scale of green corporate bonds jumped to the first place (42.2 billion yuan), exceeding the issuance scale of green financial bonds (38 billion yuan), of which the issuance of “G Three Gorges EB1” was 20 billion yuan, which increased the overall issuance scale.

On the other hand, in terms of the types of bonds, in addition to the common green financial bonds, green corporate bonds, green enterprise bonds, green debt financing instruments, green asset-backed securities and green asset-backed bills, the new green municipal special debt of local governments reflects the support of fiscal policy to green development.

In the first half of 2019, according to Green Bond Endorsed Project Catalogue (2015 Edition) issued by the central bank, the funds raised by green bonds that have been identified are mainly used for clean energy, clean transportation and pollution prevention and control. Among them, funds invested in the clean energy sector accounted for 34% of the funds raised disclosed, a significant increase from the same period last year (18%).

The amount of money invested in clean transportation still ranks second among all areas, accounting for 24% of the funds raised based on disclosed data, up significantly from the same period last year (13%).

In addition, in the first half of 2019, the number of China’s green bond issuers (25) increased significantly compared with the same period last year (17).

Compared with the same period in 2018, Gansu, Guangxi, Jiangxi, Qinghai, Sichuan, Tibet and Chongqing are new areas for issuing green bonds, while the western region has issued more green bonds, and the main areas of issuance have been further expanded.

Due to the relatively developed economy and high financial activity in Beijing, Guangdong, Jiangsu, Shandong and Zhejiang, there are a larger number of green bond issuance tranches in these regions (8, 13, 10, 8, 8, respectively), accounting for 56% of green bonds issued.

From 2016 to 2018, the annual issuance of RMB-denominated green bonds was about 200 billion yuan.

Statistics for the past three years also show that green bond issuance in the second half of the year showed an average monthly growth rate of 10% to 22%, compared with the first half of the year.

As a result, it can be expected that by the end of 2019, RMB-denominated green bonds may exceed 300 billion yuan, and the annual issuance scale is expected to reach an all-time high.

Disclaimer: This is an article created by Michael Liang for Chinasdg.org. You can find the original article here: https://chinasdg.org/2020/06/08/china-s-green-bond-issuance-increased-by-over-130-billion-yuan-in-first-half-of-2019/.

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