The Industrial and Commercial Bank of China (ICBC) just announced a big $US2bn+ green bond.
And it's Climate Bonds Certified.
We’ve long said that as China got moving on green finance, big things would start to happen.
You don’t get any bigger than ICBC in the banking world. Or anywhere else. ICBC is also the biggest publicly listed company on the planet.
So...this inaugural One Belt One Road (OBOR) Green Climate Bond that also carries Climate Bonds Certification will have its own ‘big’ impact.
The use of proceeds for this bond will be dedicated to ICBC's global financing and refinancing of eligible green assets in four categories:
- renewable energy,
- low carbon & low emission transportation,
- energy efficiency &
- sustainable water resources management.
Green Assets on the Lux Green Exchange
The announcement of the inaugural multi-billion green issuance has been made during the Beijing visit of a delegation headed by Pierre Gramegna, Minister of Finance of Luxembourg.
The bond will be listed on the Luxembourg Green Exchange (LGX) of the LUXSE. The LGX is not letting any grass grow under its feet in the green finance race, listing $74bn of green bonds in its first year of operation.
Greening the Belt and Road
We touched on this subject in our September 6th Blog Post on the annual Green Finance Forum in Beijing hosted by China’s Green Finance Committee. We just didn’t think we’d be writing about a One Belt One Road Green Climate Bond so soon.
ICBC is the largest green bond underwriting bank in China, so we’re also pleased to see in today’s announcement noted that:
“ICBC officials said that the bank will push green credit business as a long-term development strategy, actively practice the "green development" and "green finance" concept and has committed to building into a leading green credit bank internationally with a good reputation.”
Looks like there's more to come on the green finance front from the world's biggest bank.
$130 billion in 2017, $1 trillion by 2020
This signal from ICBC should jolt other global banks and corporates to move faster on green finance and issue green bonds.
The demand is there, investors stand ready and NDC based country climate plans need finance. There's plenty of headroom left to reach Climate Bonds forecast of $130bn in green issuance for 2017 and three years to reach the increasingly high profile $1 trillion by 2020 global green finance milestone.
The Last Word
More details will come once pricing closes on Friday.
In the meantime, you can see every green bond issued in China from Jan to June this year in our recent China Mid Year Market Report 2017 中国绿色债券市场半年报 2017. We’re preparing our Q3 update right now, the list of bonds just got bigger.
Or ponder the news via Twitter from Christiana Figueres’ Tuesday address to the PRI in Person conference in Berlin: China will be announcing a national carbon price by the end of 2017, likely $5/tonne.
As China gets moving….
‘Till next time,
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