Assurance Report on Pre-issuance ofChina Development BankGreen Financial Bond

November 2021

Scope and Objectives
IssuerChina Development Bank (hereinafter referred to as "CDB" or "issuer") wasestablished in 1994 and is a policy financial institution directly under the leadership of
the State Council of China. The registered capital of China Development Bank is421.248 billion yuan. The shareholders are the Ministry of Finance of the People's
Republic of China, Central Huijin Investment Ltd., Wutong Tree Investment PlatformLtd. and the National Council for Social Security Fund. And their shareholding ratios
are 36.54%, 34.68% and 27.19%, 1.59% respectively. The China Development Bank
mainly serves the major medium-term and long-term development strategies of thenational economy through financial services such as medium-term and long-term credit
and investment.
Bond Information
A Green bond, named "China Development Bank 2021 Green Financial Bond(Low Carbon Transportation Construction)" (Green Bond) would be issued by China
Development Bank, with a scale not exceeding RMB 15 billion (including RMB 15
billion). Low Carbon Transport Projects would be used by the net proceeds.
Verification Institution
China Lianhe Equator Environmental Impact Assessment Co., LTD. (Lianhe
Equator) was established in 2015, which primarily engaged in green bond third-party
certification, green financial advisory and environmental impact assessment business.
The core technical force included a great number of senior environmental protection
experts at the provincial and ministerial level, many registered consultants, financial
analysts and more than sixty registered environmental impact assessors who have theleading green financial advisory service capabilities in the industry. The Lianhe Equator
standardizes the specific certification work with the Green Bond Assessment andCertification Method System (LEIS0002-2019) was independently developed. The
Lianhe Equator also have conducted this limited assurance engagement in accordance1with the International Standard on Assurance Engagements 3000 (ISAE 3000):
Assurance Engagements other than Audits or Reviews of Historical Financial
Information. In addition, the comprehensive performance of green bond from four
dimensions, which were the characteristics of the project, the using and management of
the net proceeds, the project evaluation screening and the information disclosure was
evaluated. Ultimately, the green bond was evaluated and certified by it.

Verification Work
Verification Contents
Verification contents of Lianhe Equator about China Development Bank 2021
Green Financial Bond following aspects was included that:•

Policies and procedures of the using and management of proceeds.

•

Evaluation and screening of project standards, green attributes andcompliance.

•

Information disclosure and process.

Standard•

Climate Bonds Standard v3.0•

Climate Bonds Standard - Sector Criteria (Low Carbon Transport Version
2.0).

Responsibilities
Issuers responsibilities were included the following aspects:•

Accept on-site interviews and due diligence by the verification agency team.

•Provide relevant information data and system documents for the certification
work of verification agency.

•

Provide relevant information documents for the recruitment and investment
projects for the certification work of verification agency.

•

Ensure that the supplied information data and system documents real andeffective.

Verification agencies responsibilities were including the following aspects:•

Conduct on-site interviews and due diligence, which is based on the2

information data, system documents and information documents provided byissuer.
•Issue the verification report and limited assurance conclusion on whether theinvested projects meet the climate bond standards.

Lianhe Equator conducted the verification in accordance with the Climate Bond
Standard Version 3.0 and refer to the International Standard on Assurance
Engagements 3000(Revised) – Assurance Engagements other than Audits or Reviewsof Historical Information.

Overview of Nominated Projects
Table 1No.

Project

RegionProject Total
Investment(RMB billion)

Plan to Invest(RMB billion)

Categories

1

Metro
Project

Southern
China

4.90

1.20

Low carbon
transport

2.

Metro
Project

Southern
China

8.74

2.00

Low carbon
transport

3

Metro
Project

Southern
China

11.32

2.00

Low carbon
transport

4

Metro
Project

Southern
China

19.56

1.20

Low carbon
transport

Project Description
The project is located in
Guangdong Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 22.4km.
The project is located in
Guangdong Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 40.6km.
The project is located in
Guangdong Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 15.2km.
The project is located in
Guangxi Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 27.65km.

3

5

Metro
Project

Southern
China

16.71

0.512

Low carbon
transport

6

Metro
Project

Southern
China

35.40

1.50

Low carbon
transport

7

Metro
Project

Northern
China

18.27

1.20

Low carbon
transport

8

Metro
Project

Northern
China

18.37

0.50

Low carbon
transport

9

Metro
Project

Southern
China

19.61

0.80

Low carbon
transport

10

Metro
Project

Southern
China

11.6

0.40

Low carbon
transport

11

Metro
Project

Southern
China

22.98

0.80

Low carbon
transport

12

Metro
Project

Northern
China

19.34

3.073

Low carbon
transport

The project is located in
Guangxi Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 20.38km.
The project is located in
Fujian Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 62.4km.
The project is located in
Liaoning Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately 23.80km.
The project is located in
Liaoning Province ofChina, it is currently inthe construction phaseand the length of therailway line will beapproximately
23.008km.
The project is located in
Fujian of China, it iscurrently in theoperational phase andthe length of the railway
line will beapproximately 24.7km.
The project is located in
Fujian of China, it iscurrently in theoperational phase andthe length of the railway
line will beapproximately 13.86km.
The project is located in
Fujian of China, it iscurrently in theconstruction phase andthe length of the railway
line will beapproximately 44.78km.
The project is located in
Heilongjiang of China, it
is currently in theconstruction phase andthe length of the railway
line will beapproximately 26.5km.

4Total Amount15.185Pre-Issuance Requirements and Verification foundTable 2

1. Use of Proceeds
Climate Bonds Standard Requirement
1.1 The Issuer shall document the Nominated Projects & Assets which
are proposed to be associated with the Bond and which have beenassessed as likely to be Eligible Projects & Assets. The Issuer shallestablish a list of Nominated Projects & Assets which can be kept Up
To Date during the term of the Bond.

1.2. The expected Net Proceeds of the Bond shall be no greater thanthe Issuer’s total investment exposure to the proposed NominatedProjects & Assets, or the relevant proportion of the total Market
Value of the proposed Nominated Projects & Assets which are
owned or funded by the Issuer.

1.3 Nominated Projects & Assets shall not be nominated to other
Certified Climate Bonds, Certified Climate Loans, Certified
Climate Debt Instruments, green bonds, green loans or otherlabelled instruments (such as social bonds or SDG bonds) unless it
is demonstrated by the Issuer that:
1.3.1 Distinct portions of the Nominated Projects & Assets arebeing funded by different Certified Climate Bonds, Certified
Climate Loans, Certified Climate Debt Instruments, green bond,green loans or other labelled instruments or;
1.3.2 The existing Certified Climate Bond, Certified Climate Loanor Certified Climate Debt Instrument is being refinanced via
another Certified Climate Bond, Certified Climate Loan or
Certified Climate Debt Instrument.

Findings
The issuer has establisheda Nominated Projects &Assets List for Eligible
Projects & Assets. The
list of projects will be
continuously updated
during the term of thebond.
The expected Net
Proceeds of the Bond will
not greater than RMB 15
billion. The total amountof the listed project is
RMB 15.185 billion.
Therefore, it is expectedthat the Net Proceeds ofthe bond will not exceed
the Issuer’s total
investment exposure to
the proposed NominatedProjects & Assets.
Nominated Projects &Assets will not nominatedto other Certified Climate
Bonds, Certified Climate
Loans, Certified Climate
Debt Instruments, green
bonds, green loans orother labelled
instruments.

Requirement
Met

Yes

Yes

Yes

2. Process for Evaluation and Selection of Projects and Assets
Climate Bonds Standard Requirement

2.1. The Issuer shall establish, document and maintain a decisionmaking process which it uses to determine the eligibility of theNominated Projects & Assets. The decision-making process shall
include, without limitation:

2.1.1. A statement on the climate-related objectives of the Bond.

Findings
The issuer has establishedthe responsibilities anddecision-making process,refer to China
Development Bank Green
Bond Management
Framework (the“Framework”).
For this issuance, the net

Requirement
Met

Yes

Yes

5

2.1.2 How the climate-related objectives of the Bond are positioned
within the context of the Issuer’s overarching objectives, strategy,
policy and/or processes relating to environmental sustainability.

2.1.3 Issuer’s rationale for issuing the Bond.

2.1.4 A process to determine whether the Nominated Projects &Assets meet the eligibility requirements specified in Part C of the
Climate Bonds Standard.

2.2 Issuer should include under Clause 2.1 further aspects of thedecision-making process, including:

2.2.1 Related eligibility criteria, including, if applicable, exclusion
criteria or any other process, applied to identify and manage
potentially material environmental, social or governance risks
associated with the Nominated Projects & Assets.

2.2.2 Green standards or certifications referenced in the selection ofNominated Projects & Assets.

2.2.3 The issuer shall assess that all proposed Nominated Projects &Assets to be associated with the Bond meet the documented
objectives as stated under Clause 2.1.1 and are likely to conform to
the relevant eligibility requirements under Part C of the Climate
Bonds Standard.

proceeds of the climaterelated objectives of theBond will be invested
into the low carbon
projects to conform withthe objective of low
carbon economy. The
detailed statement will be
specified in theprospectus.
The issuer is a policy bank,
it is positioned in thestrategy of serving thecountry, and financial
resources are towards
green finance andenvironmental
sustainability. The climaterelated objectives of thebond conform to theissuer’s policy andstrategy.
This issuance aims topromote the low carbon
economy development.
The detailed description
will be specified in theprospectus.
Specified in the Use ofProceeds, ProjectEvaluation and Selection
part of the Framework.
By reviewing the
Framework, we found thatthe issuer has include
under Clause 2.1 further
aspects of the decisionmaking process.
The issuer has establishedrelated eligibility criteria
and system, managed thenominated projects &assets from environmental
and social risks aspects.
The detailed description
will be specified in theprospectus.
Specified in the Use ofProceeds part of the
Framework.
The proposed NominatedProjects & Assets to be
associated with the Bond
meet the documented
objectives as stated under
Clause 2.1.1 and are likely
to conform to the relevant
eligibility requirements
under Part C of the
Climate Bonds Standard.

Yes

Yes

Yes

Yes

Yes

Yes

Yes

6

3. Management of Proceeds
Climate Bonds Standard Requirement

3.1 The systems, policies and processes to be used for management of
the Net Proceeds shall be documented by the Issuer and disclosed to the
Verifier, and shall include arrangements for the following activities:

3.1.1 The Net Proceeds of the Bond can be credited to a sub-account,
moved to a sub-portfolio, or otherwise tracked by the Issuer in an
appropriate manner and documented.

3.1.2 The balance of unallocated Net Proceeds can be managed as
per the requirements in Clause 7.3.

3.1.3 The earmarking process can be used to manage and account for
funding to the Nominated Projects & Assets and enables estimationof the share of the Net Proceeds being used for financing andrefinancing.

Findings
The issuer has engaged the
independent third partyLianhe Equator
Environmental Impact
Assessment Co., LTD. toconduct pre-issuanceassurance, also the issuer
will conduct post-issuanceassurance. The systems,
policies and processes to be
used for management of the
Net Proceeds are
documented by the Issuer
and disclosed to the third
party.
By reviewing the
Framework, the issuer has
defined the responsibility on
the use and management ofproceeds. The issuer will
maintain a ledger to keep
track of the use of proceeds.
By reviewing the
Framework, the balance of
unallocated Net Proceeds
will be documented in theledger.
Any balance of issuanceproceeds which are notallocated will be invested inGreen Bonds (the bonds will
NOT be related togreenhouse gas intensive
projects which areinconsistent with thedelivery of a low carbon andclimate resilient economy)
issued by non-financial
institutions, and in money
market instruments withgood market liquidity.
By reviewing the
Framework, the issuer will
maintain a ledger to manage
and account for funding to
the Nominated Projects &Assets and enableestimation of the share of
the Net Proceeds being used
for financing;

Requirement
Met

Yes

Yes

Yes

Yes

4. Reporting Prior To Issuance
Climate Bonds Standard Requirement
4.1 The Issuer shall prepare a Green Bond Framework and make itpublicly available prior to Issuance or at the time of Issuance. The

Findings
The issuer has established
China Development Bank

Requirement
Met
Yes

7

Green Bond Framework shall include, without limitation:
4.1.1 Confirmation that the Bonds issued under the Green Bond
Framework are aligned with the Climate Bonds Standard. This may
include statements of alignment with other applicable standards,
such as the EU Green Bond Standard, the ASEAN Green Bond
Standard, Chinese domestic regulations, Japanese Green Bond
Guidelines, etc.
4.1.2 A summary of the expected use of proceeds, as defined under
Clause 1.1, and the expected contribution of the relevant sectors or
sub-sectors to the rapid transition required to achieve the goals of
the Paris Climate Agreement.
4.1.3 A description of the decision-making process, as defined
under Clause 2.1, with particular reference to the requirements inClause 2.1.2.
4.1.4 on the methodology and assumptions to be used for:confirming, where required by relevant Sector Eligibility Criteria,
the characteristics or performance of Nominated Projects & Assets
required to conform to the relevant eligibility requirements underPart C of the Climate Bonds Standard; and any other additional
impact metrics that the issuer will define.

4.1.5 A summary of the approach to the management of unallocated
Net Proceeds in accordance with Clause 3.1.

4.1.6 The intended approach to providing Update Reports to reaffirm
conformance with the Climate Bonds Standard while the Bond
remains outstanding.

4.1.7 The list of proposed Nominated Projects & Assets associatedwith the Bond and the investment areas, as provided in Clause 9.1, into
which the Nominated Projects & Assets fall. Where there are limits on
the amount of detail that can be made available about specificNominated Projects & Assets, information shall be presented on theinvestment areas which the Nominated Projects & Assets fall into,
provided in Clause 9.1, and the Issuer shall provide an explanation of
why details on Nominated Projects & Assets is limited.
4.1.8 Where a proportion of the Net Proceeds are used forrefinancing, an estimate of the share of the Net Proceeds used forfinancing and refinancing, and the relevant Nominated Projects &Assets or investment areas which may be refinanced. This may also
include the expected look-back period for refinanced NominatedProjects & Assets.
4.2 The Issuer shall include in the Disclosure Documentation:
4.2.1 The investment areas, as provided in Clause 9.1, into which
the Nominated Projects & Assets fall.
4.2.2 The intended types of temporary investment instruments forGreen Bond Management
Framework.
By reviewing the
Framework, we found thatthe bond issued is alignedwith the Chinese domestic
regulations and Climate
Bonds Standard.
The summary of the
expected use of proceeds is
disclosed Table 1, all thesectors belong to the low
carbon industry to achieve
the goals of Paris Climate
Agreement.
A description of thedecision-making process is
specified in the Framework.
The methodology andassumptions to be used for
confirming thecharacteristics or
performance of NominatedProjects & Assets
Specified is specified in
Framework.
A summary of the approachto the management of
unallocated Net Proceeds is
specified in the Framework.
The issuer will engage aqualified independent third
party to conduct postissuance assurance toproviding Update Reports
to reaffirm conformancewith the Climate Bonds
Standard while the Bond
remains outstanding.
The list of proposed
Nominated Projects &Assets associated with theBond and the investmentareas, as provided in Clause
9.1, into which theNominated Projects &Assets fall is disclosed inTable 1.

Yes

Yes

Yes

Yes

Yes

Yes

Yes

The estimate of the share of
the Net Proceeds used forfinancing is disclosed in theissuance document.

Yes

/

/

The investment areas, as
provided in Clause 9.1, into
which the NominatedProjects & Assets fall isdisclosed in Table 1.
Any proceeds which are

Yes

Yes

8

the management of unallocated Net Proceeds in accordance with
Clause 7.3.

4.2.3 The Verifier engaged by the Issuer for the mandatory
verification engagements.

4.2.4 The intended approach to providing Update Reports toreaffirm conformance with the Climate Bonds Standard while theBond remains outstanding, including the location of the publisheddocuments.

4.2.5 The CBI Disclaimer provided in the Certification Agreement.

temporarily unallocated to
Eligible Green Projects will
be invested in Green Bonds(the bonds will NOT be
related to greenhouse gas
intensive projects which areinconsistent with thedelivery of a low carbon andclimate resilient economy)
issued by non-financial
institutions, and in money
market instruments withgood market liquidity, andwill be managed to comply
with liquidity management
policy. This is disclosed in
the Framework.
The issuer has engaged
Lianhe Equator
Environmental Impact
Assessment Co., LTD. toconduct pre-issuanceassurance, also the issuer
will engage Lianhe Equator
Environmental Impact
Assessment Co., LTD. toconduct post-issuanceassurance.
The issuer will engage
Lianhe Equator
Environmental Impact
Assessment Co., LTD. toconduct post-issuanceassurance to providing
Update Reports to reaffirm
conformance with the
Climate Bonds Standard
while the Bond remains
outstanding.
The CBI Disclaimer
provided in theCertification Agreement is
specified in the issuance
document.

Yes

Yes

Yes

Verification and Conclusion
Verification Opinions
China Development Bank Green Bond Management Framework which issued by
CDB has reviewed by Lianhe Equator. Lianhe Equator has interviewed the leadershipand relevant responsible department of CDB. In addition, it was not found any
discrepancies of CDB in the using and management of proceeds, project evaluation andscreening, information disclosure and reporting.

9Limited Assurance Conclusion
This Green Bond issuance scale will not exceed RMB 15 billion, including 12
nominated projects which are Low carbon transport. The total amount which will invest
will be RMB 15.185 billion which cover the green bond issuance quota. Based on thelimited assurance procedures conducted, nothing has come to Lianhe’s attention thatcauses us to believe that, in all materials aspects, China Development Bank 2021 Green
Financial Bond- Low Carbon Transportation Construction is not in conformance withthe requirements of the Climate Bonds Standard Version 3.0.
Statement
The copyright of the verification suggestions belongs to the verification agency
and the issuer can publish the suggestions after obtaining the permission of theverification agency.
Except for the principal relationship between the verification authority and theissuer, there is no relationship among the verification authority, the verification
personnel and the issuer that influences the independence, objectivity and impartialityof the verification action.
The conclusion of this verification report is that on the basis of sufficientinvestigation, reasonable evidence collection and comprehensive analysis, theverification agencies make independent judgments according to reasonable standards
and procedures without changing their verification suggestions due to the improper
influence of issuers and any other organizations or individuals.
The primary purpose of this verification is to verify the purpose and managementof the green bond fund-raising, project evaluation and screening, and information
disclosure. It only provides information support in the above fields. The verification
agency does not accept liability for damages arising from erroneous or incomplete
information from the issuer.
In this verification, the issuer is responsible for the completeness, accuracy andtimeliness of the verification suggestions, which are based on the information provided
by the issuers.
There are some inherent limitations in this verification process. For example, it

10may be difficult to detect fraud, errors and irregularities if the verification is conducted
only on selected information.
This verification suggestion can not be interpreted as any indication or guarantee
for relevant bond investment decisions. In any case, this suggestion can not be used as
an explanation or guarantee for the actual situation of bond economic performance,
credit evaluation and fund-raising purposes.

Liu-Jingyun （刘景允）Green Financial Business Division General Manager
China Lianhe Equator Environmental Impact Assessment Co., LTD.
Date：11/22/202111