Check out the latest quarterly developments and trends of the Chinese green bond market
Full versions in both English & Chinese is available here.
In spite of the fact that Q3 issuance of USD8.5bn translates to a 9% drop from the USD9.4bn in Q3 2017, the total amount of green bond issued in the first three quarters of 2018 has reached USD21.5bn, surpassing the USD20.9bn issued in the same period last year. So far, China’s green bond market has been primarily driven by the momentum in the beginning of this year.
In the Q3 newsletter, we found that 49% (or USD4.2bn) of quarterly volumes from Chinese issuers is aligned with international green bond definitions, while the rest has been excluded in accordance with the CBI Green Bond Database Methodology. Proceed allocation to working capital and assets/projects that are not aligned with CBI Taxonomy remain the primary reasons for exclusion.
The largest proportion of Q3 proceeds were allocated to Renewable Energy, as defined by CBI. The share allocated to Water has been increasing since the beginning of this year, from 7% in Q1 to 18% in Q3. Proceeds will be used for a variety of project types, ranging from wastewater treatment to stormwater collection and water distribution.
EY remains the largest external reviewer for Chinese issuance, followed by Lianhe Equator, Deloitte and CECEP Consulting. China Construction Bank’s USD500m deal was the only Certified Climate Bond from a Chinese issuer in Q3.
With the release of the updated Climate Bonds Taxonomy, CBI has started reviewing previously excluded green bonds especially those for utility tunnel and hydro projects. A bond may be included in our database retrospectively if proceed allocations are compatible with the updated asset types and screening indicators. This reflects the evolution of scientific thinking and internal guidance on assets categories.
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