asia

> China Green Munis: As a market test, the Chinese Govt has announced it will allow 2 cities and 2 provinces to issue local govt bonds for environmental projects. See http://goo.gl/OKaPh and http://goo.gl/uIG0H. That's right, green and climate bonds, as foreshadowed in a number of mayoral speeches over the past year. It's still unclear whether overseas investors wanting to have an exposure to Chinese debt will be allowed to buy.

Environmentally-themed Uridashi bonds (non-JPY denominated bonds sold directly to Japanese individual investors) have been popular in Japan for some time, making it by far the biggest market for such bonds. We've now seen issues by everyone from the World Bank and the ADB to Norway's Kommunalbanken, who have just issued USD180 million worth.

1. The Indian government is planning to use the proceeds from their new coal tax to help set up a green bank to fund renewable energy projects. Now that's a good idea for countries like the US, Australia and Brazil!

2. New article: We can learn from Japanese state banks how to use Climate Bonds to fund the transition to a low-carbon economy.

A senior provincial official recently told China Daily that Chinese financing for clean energy may reach 8 trillion yuan, and China may issue yuan-denominated "green bonds" to meet financing demands.

Gao Cailin, director general of the Office of Financial Affairs of Jilin Province, said that "The soaring demand would create huge space for development of 'green finance'."