State Grid Unit Sells China's First Carbon-Neutral ABS to Fund Green Projects
Chen Hongjie
DATE:  Mar 19 2021
/ SOURCE:  Yicai
State Grid Unit Sells China's First Carbon-Neutral ABS to Fund Green Projects State Grid Unit Sells China's First Carbon-Neutral ABS to Fund Green Projects

(Yicai Global) March 19 -- A unit of China's electric utility has issued China’s first carbon-neutral asset-backed securities, looking to finance nearly CNY1.8 billion (USD268.5 million) worth of green energy projects.

Some CNY1.7 billion worth of senior class bonds will carry an interest rate of 2.99 percent, the lowest yield of bonds with the same maturity of 180 days in the financial leasing sector so far this year, Yicai Global learned from State Grid International Leasing. The remainder of CNY90 million (USD13.8 million) belongs to a subordinate class. Senior and subordinate classes refer to different levels of risk tolerance and returns.

The issuance is timely as China has been pledging to majorly cut its carbon emissions during the Five-Year Plan for 2021-2025.

SGIL will use the proceeds of the bonds that are based on collateralized assets to support wind power, hydropower, and photovoltaic energy projects, it said. The bonds are rated as G-1, the highest level of green securities.

The upcoming projects are expected to reduce carbon dioxide emissions by almost 2.4 million tons per year, replace nearly 1.2 million tons of coal, cut sulfur dioxide emissions by 17,500 tons, as well as slash nitrogen oxide emissions by 9,700 tons, according to China Chengxin Green Fund Technology.

Founded in 2011, SGIL has CNY11.1 billion (USD1.7 billion) in registered capital. State Grid Yingda has a 75 percent stake in it and State Grid Overseas Investment holds the remainder.

Editor: Xu Wei, Emmi Laine
 

 

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Keywords:   APCP,Carbon-neutral