The People’s Bank of China (PBOC), the National Financial Regulatory Administration (NFRA), and six other government departments have issued new guidelines to support the development of green finance in the country. Specifically, the guidelines call on financial institutions to support eligible green and low-carbon companies along China’s Yangtze River Economic Belt in raising capital. The belt is China’s biggest economy zone, covering 11 provinces and municipalities along the Yangtze River – reaching Shanghai in the east to Sichuan and Yunnan in the west. It covers 21% of China’s surface area and represents 44% of its GDP. Per the new guidelines, eligible green and low-carbon firms will be encouraged to raise capital via green bonds and equity fundraising – including through IPOs, refinancing, and M&A activity. The proceeds would be deployed to improve waste treatment, green tech and pollution control. Financial institutions and businesses along the belt will also be encouraged to issue green bonds in line with domestic and international standards to facilitate global participation in China’s low-carbon transformation. In addition, the guidelines promote the use of China’s National Green Development Fund to boost pollution reduction, ecological restoration, and the development of green transport networks and clean energy. “Carbon emissions data quality and carbon footprint management mechanisms will be improved by nurturing high-level third-party tabulators,” the guidelines noted. The document comes two weeks after China’s State Council announced plans to extend the PBOC’s programme to provide low-cost loans to financial institutions until end-2027, aiming to support companies in cutting their carbon emissions. China has pledged to reach peak emissions by 2030, with goals to achieve net-zero emissions by 2060. In July, during the third plenum of the Communist Party’s Central Committee, top Chinese policymakers had also committed to promoting green finance across the country.
The guidelines call on financial institutions to support eligible green and low-carbon companies along the Yangtze River Economic Belt in raising capital.https://t.co/7Mp12B2eZy
— Regulation Asia (@RegulationAsia) September 2, 2024
