CHINA GREEN BOND MARKET Newsletter
中国绿色债券市场简报
JULY-SEPTEMBER 2016 ISSUE 1 2016年7月-9月 总第1期

News and Events
The world’s first Climate-Aligned Bond Index
launched in Beijing

Green bonds get a boost in the G20 Communique

China Central Depository & Clearing Co. Ltd
has partnered with Climate Bonds Initiativeand China Energy Conservation andEnvironmental Protection Consulting Co. Ltd
launched the ChinaBond China Climate-Aligned
Bond Index. This identifies a broad rangeof fixed income investments which support
low carbon and climate resilient infrastructure,including green bonds. The Index is madeup of 210 constituents and has a total market
value of 1.33 trillion RMB. Find out more/
Download the methodology/ 下载方法论
UK-China Collaboration - Growing a Global
Green Bond Market report launched in London
Climate Bonds Initiative and the UK
Department of International Trade (DIT)
launched the UK-China Collaboration on
Growing a Global Green Bond Market reportat the Green Finance Media Roundtable heldby the City of London in mid September.
Published in both English and Chinese,
the report recommends actions for UK-Chinacollaboration to lead development ofglobal green bond markets. Find out more/
Download report/ 中文报告

Reflecting both China’s influence as this year’s
G20 Chair and the growing importance of green
finance amongst major economies following
COP21, the Hangzhou Communique builds
on the Synthesis Report issued by the Green
Finance Study Group (GFSG). This is the firsttime green bonds have been directly referenced
in a Leaders’ Communique. Find out more/
Download report/ 中文报告
Chinese version of State of the Market 2016
Report launched in Shanghai
Climate Bonds Initiative launched the Chinese
Version of its 5th annual report ‘Bonds and Climate
Change: State of the Market in 2016’ in Shanghai
during August. The reports reveals that China is
the largest country of issuance in the climatealigned universe. Find out more/ Download report/
中文报告Shanghai Stock Exchange and CECEP toimprove local green bond listing rules
On 28th September, China Energy Conservation& Environmental Protection Group (CECEP)
signed a strategic agreement with the Shanghai
Stock Exchange, strengthening their cooperationin establishing and improving the standards andrules for listing green bonds. Find out more

At a glance
Total Q3 Chinese Issuance:
USD 11.3 billion/RMB 75.5 billion
Issuance that meets international
definitions:
USD 6.7 billion/RMB 44.5 billion
Largest issuer: Bank of China
Largest issuing sector: Multi-sector

Policy Update
China ‘Green Finance Mechanism’ announcement
The People’s Bank of China and six other central
agencies jointly issued “Guidelines for Establishing
the Green Financial System” in late August, justprior to the G20 Hangzhou Summit.
The Guidelines spell out the important roleof the securities market in financing green
investment, unify the domestic green bondstandards, support qualified green companies
to raise funds, support the development of green
bond indices, green equity indices and relatedproducts; and require a gradual establishmentof a mandatory environmental information
disclosure system for listed companies andbond issuers. Find out more/ 中文指引

Q3 Chinese Green Bonds Issuance
ISSUER

MARKETDATEAMOUNT ISSUED VERIFIER

RATING AGENCY

RATINGUSE OF PROCEEDS*

China Datang
Renewables

Shanghai Stock
Exchange

26 Sep

CNY 500 million

EY

Golden CreditRatingAAAEnergy

Wuhan Metro

China Interbank

22 SepCNY 2 billion

China Credit Rating Co., Ltd.

CCXI

AAA

Transport

China Energy
Conservation andEnvironmental
Protection Group

Shanghai Stock
Exchange

16 Aug
22 Sep

CNY 3 billion

EY and CECEP

Dagong

AAAMulti

Beijing Enterprise
Water Group (China)
Investment Limited

Shanghai Stock
Exchange

12 Sep

CNY 2.8 billion

SynTao Green Finance

SBCR

AAA

Adaptation

Xinjiang Goldwind

China Interbank

05 Sep

CNY 500 million

DNV-GL

CCXI

AAA

EnergyChina Three Gorges

Shanghai Stock
Exchange

26 Aug

CNY 6 billion

EY

CCXIAAA

Energy (Hydro)*

Beijing Enterprise
Water Group

Shanghai Stock
Exchange

23 Aug

CNY 700 million

SynTao Green Finance

SBCRAAAAdaptation

Bank of Jiangxi

China Interbank

18 July4 Aug

CNY 5 billion

EYLianheAA+Multi (inc.Clean Coal)*

Shanghai Pudong
Development Bank

China Interbank

14 JulCNY 15 billion

EY

SBCRAAA

Multi

Industrial Bank

China Interbank

14 JulCNY 20 billion

Climate and Energy FinanceResearch Center at CUFE;
Zhongcai Chuanglv

SBCRAAA

Multi (inc.Clean Coal)*

Bank of China

Luxembourg Stock
Exchange/ Hong Kong
Stock Exchange

05 Jul

USD 3 billion

EYFitch/Moody’s

A/A1Multi* CBI Taxonomy exclude clean coal projects, although it is permissible under the China Green Bond Endorsed Project Catalogue. Also, large hydropower projects are currently excluded due to issues of reservoir emissions
and other social and environmental impacts. There may be scope to include these in the future but more research will be required.

JAN-SEPT 2016 ISSUE 1

Comment: Why hydro bonds are often controversial?
Recently, there has been discussion amongst
international investors around large scale hydroprojects.
Hydroelectricity has several advantages –including a high level of reliability and efficiency,
proven technology, low operating costs andcan provide baseload and standby power. Some
reservoirs provide multiple benefits, including
water storage and flood control. Hydropower
generation produces little waste, doesn’t
contribute to air quality problems and is mostly
low carbon.
However, there can be well-known
disadvantages, mainly stemming from
ecological damage, loss of livelihood anderosion.

We also need to be concerned about theresilience of hydropower assets in the face ofchanged precipitation and water availability
from climate impacts.
There is increasing recognition that artificialreservoirs produce emissions. This can vary
greatly - and can change over the life of thereservoir. There has been a suggestion more
greenhouse gases are released from reservoirs
in the tropics, but recent evidence suggests that
this is more nuanced than latitude alone. Depth,
rainfall levels and ecosystem productivity arethought to influence emissions and siting,design and operation can also influence
intensity (GHGs released per kilowatt-hour).
Smaller hydro under 25MWh are generally

thought to avoid these problems, green bonds
issued against them have been accepted by themarket, and in green bond indices. But larger hydrohas also proven it can be a key low-carbon energy
source, subject to addressing the above concerns.
A Technical Working Group including
development banks, environmental NGOs andthe hydropower industry has been convened
by Climate Bonds to draw up rules and define
practices that minimise these impacts. You canread more about the progress here.
Existing Chinese hydro bonds contain some assetsthat fall into these areas of complexity. For thisreason, we have been excluding them from ourdatabase pending completion of our Technical
Working Group process .

Market Data
Allocation of proceeds according
to CBI Taxonomy

The growth of Chinese and global green bonds• Non Chinese issuance• Chinese issuance that only meets PBoC’s definition of green• Chinese issuance that meets both international and PBoC’sdefinition of green

Adaptation 1%

DNV-GL 1%
China Credit Rating Co., Ltd. 4%
CECEP 7%
SynTao Green Finance 8%$25 bn$20 bnWaste& Pollution
16%$15 bn$10 bnEnergy
17%

$5 bn
$0Q3
2015

Q42015

Q12016

Q22016

Second party reviews ofChinese green bonds that meetinternational definitions of green

Multi
40%

Q3

EY80%

Q3

Transport
26%

Q3
2016

Individual issuer’s allocation of proceeds according to PBoC’s Green Bond Endorsed Project Catalogue• Energy Saving• Resource Conservation and Recycling• Clean Energy• Multi• Pollution Prevention and Control• Clean Transportation• Ecological Protection andClimate Change Adaptation• Refinancing

Wuhan Metro

China Datang

Xinjiang Goldwind

China Three Gorges

CECEP

Beijing Enterprise
Water Group (China)
Investment

0%

Beijing Enterprise
Water Group20%

Industrial Bank

40%

Bank of Jianxi60%

Bank of China

80%

Shanghai Pudong
Development Bank

100%

Latest Reports
UK - China Collaboration on Growing a Global
Green Bond Market report was prepared by ClimateBonds Initiative and the International Institute for
Sustainable Development (IISD), together with theUK Department of International Trade.
Download English report/下载中文报告Follow us

Bonds and Climate Change: State of theMarket in 2016 is the 5th annual review byClimate Bonds of global green bond developments.
Download English report/ 下载中文报告This newsletter is also available in Chinese您也可获取本季报中文版

Disclaimer: The information contained in this newsletter does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only.
The Climate Bonds Initiative accepts no responsibility for content on external websites. The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely
yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organization makes, nor for investments made by third parties on behalf of an individual or organization.