Bank of China’s domestic and overseas green bond businesses go hand in hand

In association with Bank of China
4 min read
Asia

As the longest-established bank in China, Bank of China has always been mindful of “bearing great responsibility for what’s of vital importance for the nation”, consciously combining its own development with the destiny of the country, actively practicing the concept of green finance, establishing a successful green bond product system, giving full play to the advantages of globalisation and internationalisation, and effectively supporting relevant institutions to carry out green financing in domestic and foreign markets. By the end of November 2021, BOC’s domestic and overseas green bond businesses had achieved impressive results, topping their respective league tables. BOC underwrote 64 domestic green bonds in total, with an issuance volume of about Rmb106.9bn, ranking first among commercial banks; and underwrote a total of 35 overseas green bonds, with a volume of about US$19.5bn, ranking first among Chinese banks.

BOC has had many highlights in the field of domestic green bonds. This year, BOC, as the leading underwriter and bookrunner, supported China Three Gorges Corporation, State Power Investment Corporation and Huaneng International Power Co., Ltd. to successfully complete the issuance of three domestic carbon-neutral bonds totaling Rmb3.6bn, accounting for 56% of the initial issues, and successfully introduced high-quality overseas investors. Funds raised from carbon-neutral debt serve the national green strategy, supporting the construction of Baihetan Hydropower Station of Three Gorges Group, Huaneng International Northeast Wind Power Project, and the national power investment photovoltaic and wind power project respectively. BOC issued the top three “carbon neutral” asset securitisation products in the whole market for China State Grid International Financial Leasing, Shanghai Shenneng Leasing and State Power Investment; the first ABS product backed by green car loans in the market for SAIC Finance Company; the first batch of sustainable development-linked bonds for Huaneng Group, which was used to increase the installed capacity of new energy in Gansu. By taking the lead in introducing a three-dimensional “green bond supporting mechanism”, investment, loans and bonds are effectively linked to help the development of green bonds in all directions.

In the international green bond market, BOC is also a pioneer and leader. As an issuer, BOC completed the first blue bonds, the first transition bonds and the first species diversity bonds from any Chinese issuer in overseas markets. As an underwriter, it took the lead in launching a green consultancy service for overseas bonds among Chinese peers, and assisted a number of high-quality issuers to obtain overseas green bond certification and obtain cash subsidies under the Hong Kong Monetary Authority Green Bond Funding Scheme. In the first overseas bond issued by Shenzhen Municipal People’s Government in mid-October this year, BOC, as the exclusive green structuring consultant, assisted the issuer in obtaining overseas green bond certification. This green issue drew wide attention and was actively subscribed by Chinese and foreign investors from countries along “The Belt and Road Initiative” and offshore RMB financial centres. This is of great significance to the construction of Guangdong-Hong Kong-Macao Greater Bay Area, the internationalisation of RMB and the implementation of the strategy of “peak carbon dioxide emissions, carbon neutrality”, and also demonstrates the comprehensive service ability of BOC in the field of overseas green bonds.

In addition to deepening the bond market, BOC actively participated in the top-level design, strengthened communication with the International Capital Markets Association (ICMA), Green Investment Principles (GIP), the green finance professional committee of China Finance Association and other domestic and foreign green authorities, and enhanced the international voice of China’s green bond market. In view of the “China Green Bond Principles” drafted by the Green Bond Standards Committee under the Interbank Market Dealers Association, BOC leveraged its cross-border advantages, provided domestic and foreign comparative opinions, and actively participated in rule-making discussions. This principle integrates the interbank and exchange green bond guidelines, and the overall framework refers to ICMA Green Bond Principles and other international rules. As a member of the working group and head of the publicity group of the Green Standards Committee, BOC will continue to cooperate with development work, act as a voice for the market and build China’s green financial brand.