(Yicai Global) Feb. 8 -- An offshore unit of China’s State Power Investment, a state-owned enterprise that is the world's largest renewable power producer, has issued the country’s first green panda bond, with the funds raised set to build wind and solar power projects in Kazakhstan.

Hong Kong-based China Power International Holding issued the CNY800 million (USD117.8 million) bond on the Shanghai stock exchange last week. It has a three-year term, a G-1 rating as a green bond, an AAA credit rating, and a nominal interest rate of 3.3 percent, the lowest among same-term bonds issued by central government-owned electric power companies.

Green panda bonds are Chinese yuan-denominated notes sold by offshore issuers on the Chinese mainland market, with the proceeds earmarked for investment in overseas green assets and projects.

Taking advantage of the current interest rate spread between the yuan and US dollar, China Power International raised the funds in yuan via panda bonds, while investing in the Kazakhstan projects in dollars because, with proper currency hedging, the company expects to save about 30 percent on the financing cost, Yicai Global learned. 

China Power International develops, invests in, builds, and operates conventional and new energy power projects, and owns clean energy assets in many counties, including Kazakhstan.

Editors: Tang Shihua, Martin Kadiev