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Green Bond Weekly 12.2-25.2

Time:2018-03-02 From: Author:

一 Issuance


Labelled Green Bonds

Bond   name

Issue date

Maturity   (years)

Rating

Coupon rate

Bond type

GB

Amount (RMB)

18 Yuexiu   Group GN001

24/02/18

5,00

AAA

5,48

Medium-term note

3

20,00

Total







20,00


Non-labelled Green Bonds

Issue date

Maturity   (years)

Rating

Coupon rate

Bond type

GB

Amount (RMB)

23/02/18

7,00

AA

7,98

Enterprise debt

3

3,00







3,00

Source: Wind Securities

 

Yuexiu Group issued the self-titled 18 Yuexiu Group GN001 bond that carries a coupon rate of 5.48%, and a maturity of 5 years. The proceeds will be spent in environmental relocation and forestry integration projects. The face value is 2 billion yuan.

 

In the non-labelled green bond market the 18 Renhuai Water Investment Bond 01 was issued with a coupon rate of 7.98%, an issuance period of 7 years a face value of 300 million yuan. The proceeds will go towards water supply projects.

 

As of this week, there have been 3 green bonds issued in 2018 amounting to a total of 4 billion yuan. A total of 16 non-labeled green bonds were issued and the total green bonds reached 49.238 billion yuan.

  

Green Bond Index movements


 

Zhongcai-State-owned High Grade Green Bond Index and High Grade Unlevered Green Bond Index showed an overall upward trend in the second half of February. Among them, the high grade green bond index (wealth) closed at 133.2006 on Feb. 23, up 0.22%. The high-grade unlabeled green bond index (wealth) closed at 132.9810 on Feb. 23, up 0.19% The benchmark Green Bond Index (Wealth) closed on February 23 at 102.0789, up 0.36%.

 

二 Market News

Domestic News

 

1. The Central Bank to re-examine macro-prudential of green finance industry

On February 14, the People's Bank of China (PBoC) released its report on the implementation of China's monetary policy in the fourth quarter of 2017.

The report points out that under the leadership of the CPC Central Committee and the State Council, the PBoC will adhere to the general tone of seeking stability while maintain progress, implement new development concepts, continuously improve macroeconomic regulation and control and implement it according to the major movements within the economy which encompasses a steady and neutral monetary policy, so as to create a financial system aimed at supporting supply-side structural reforms.

At the 19th CPC National Congress requirements for a sound dual-pillar regulatory framework for monetary policy and macro-prudential policies was introduced.

The PBoC has implemented the strategic plan of the CPC Central Committee and the State Council and has actively managed the macro prudential policy framework in Chinas economy.Macro-prudential evaluation (MPA) is an important tool of the PBoC in this regard, and plays a vital role in preventing systemic financial risks and maintaining financial stability.

In the two years since the MPA was officially implemented, the PBoC proactively conducted assessment work, guided financial institutions to strengthen self-restraint and self-discipline management, promoted sound operation of financial institutions and enhanced the sustainability of financial services to the real economy, while keeping firmly to the principle of no systemic financial risk on the bottom line.

At the same time, the PBoC also sums up its experience with a further aim to improve and perfect the composition of the MPA, weighting and selecting relevant parameters of the index.

Following the inclusion of off-balance-sheet wealth management in the broad credit indicator range in the first quarter of 2017 and the assessment in the third quarter of 2017, green finance is included in the MPA’s "Implementation of the Credit Policy".

In the next phase of the main policy ideas, the report clearly and further improve the macro-prudential assessment, interbank certificates of deposit, green finance into the MPA examination.

Source: People's Bank of China

 

Foreign news

1. Australian Clean Energy Finances $ 25 million investment in Australia's first green mortgage bill

Recently, Australia's Clean Energy Finance has invested AUD $25 million into Australia's first green mortgage bill. The bill is part of the A AUD $2 billion mortgage-backed securitization project of the National Bank of Australia and the Climate Bonds Initiative accredits the instrument for Low Carbon Construction Projects.

Clean Energy Finance is a state-owned financial company established by the Australian government based on the Clean Energy Finance Act of 2012 and is committed to providing financing services for projects that have the potential for reducing carbon emissions. Since 2011, Australia has issued a total of 15 climate bonds. Clean energy companies is a cornerstone for investors, the company of Australia's green bond market, an important role can be seen.

Richard Lovell, head of debt markets at Clean Energy Finance, said the deal with the National Australia Bank is expected to further develop green residential mortgage-backed securities. CEO Lan Learmonth said the deal is a huge leap forward for the Australian green bond market and has drawn the attention of local and global investors.

Source: bioenergy international

 

2. Indonesian issues first green bond

Indonesia issued a USD $1.25 billion, five-year green sukuk on the 23rd of February. The sukuk carries an interest rate of 3.75%, below the initial guide price of 4.05%, which is in line with Islamic financial norms. Indonesia became the first Southeast Asian country to issue green sovereign bonds in international markets.

Indonesia has one of the biggest emitters of greenhouse gas emissions and hopes to encourage investors to invest in climate-friendly projects with a new focus on green finance. Last year many Southeast Asian countries were upgraded by Standard & Poor's, a rating agency, and three major Indonesian institutions received better ratings, which will reduce their financing costs in the international market.

However, the Financial Times pointed out that bond investors they still have to closely observe whether the Indonesian government has the determination to implement environmental protection policies. More than half of Indonesia's electricity production depends on coal power, making it the fifth-largest greenhouse gas emitter in the world.

Climate Action Tracker points out that Indonesia's climate policy has its own contradictions. On the one hand, it wants to increase the proportion of renewable energy, but at the same time its dependence on coal is increasing.

According to the Climate Action Tracker, one Indonesian banker said that with the issuance of green bonds in Indonesia, the government has requested its department to implement environmental assessment of all the subsidized projects of the bond.

 Source: Reuters News

 

Acadmia

Policy

1. National Development and Reform Commission released "Catalog of National Key Energy-saving and Low-carbon Technologies Promotion (2017, Energy Saving Part)"

On February 12, 2018, in order to implement the "Energy Conservation Law of the People's Republic of China" and the "Opinions of the State Council on Accelerating the Development of Energy-saving and Environmental Protection Industries", the "Circular of the State Council on Printing and Distributing the Integrated Work Plan for Energy Conservation and Emission Reduction during the Thirteenth Five-year Plan" Energy-saving technologies are advanced to guide energy-using units to adopt applicable new energy-saving technologies to promote conservative use of energy resources and promote green development. According to the Interim Measures for the Promotion and Management of Energy-saving and Low-carbon Technologies by the National Development and Reform Commission, NDRC, organized the preparation and announcement of "Catalog of National Key Energy-saving and Low-carbon Technologies for Promotion (2017, Energy Saving Part)" covering 13 industries including coal, power, steel, nonferrous metals, petroleum and petrochemicals, chemicals and building materials with a total of 260 key energy saving technology. "National key energy-saving low-carbon technology promotion directory" since the announcement of the date of abolition.

Source: National Development and Reform Commission

 

2. Minister of Environmental Protection launches "Green Shield 2018" focused on the protection of drinking water sources

On February 23, Li Ganjie, Minister of Environmental Protection, hosted a standing meeting of the MEP in Beijing to review and approve in principle the "Green Shield 2018 National Action Plan for the Supervision and Inspection of National Nature Reserves" and the "National Drinking Water Source Environment Protection of Special Action Plan" and "2018 Black-odor water treatment and urban, park sewage treatment facilities construction special action plan. "

The plans point out that in recent years, positive progress has been made in the effort to protect the drinking water sources in China, but the potential environmental risks of drinking water sources still has something to wish for. The plan effectively urges local governments to take on them the responsibility of protecting drinking water sources, strive to eliminate environmental safety hazards of drinking water sources, and improve drinking water source environmental safety and security standards.

The meeting stressed that the 2018 Black Smelly Water Body remediation and urban park sewage treatment facilities is to implement the "Water Pollution Prevention Law" and the "Water Pollution Prevention and Control Action Plan" to enlighten the public around outstanding environmental problems.

It is necessary to uphold a principle of strict supervision and seeking truth from facts, classify problems discovered, clarify evaluation criteria and criteria for the remediation effect of black-odor water bodies. Local authorities are urged to speed up the construction of short-circuit boards for environmental infrastructure in cities and parks, and fundamentally solve the problem of black water stench problems.

Source: MEP website

 

Academic Conference

 

1. The first G20 Sustainable Finance Research Team 2018 will be held

On February 22, the Group of 20 (G20) Sustainable Finance Study Group held its first meeting during Argentina's G20-presidency in London, England. The meeting was co-chaired by the People's Bank of China and the Bank of England. More than 80 representatives from G20 members, guest nations and international organizations attended. The meeting discussed and approved the research team's three major research topics in 2018, namely, sustainable asset securitization, the development of sustainable private equity (PE) and venture capital (VC) and the use of financial technology to develop sustainable finance. The research team will form the "2018 G20 Sustainable Financial Research Panel Synthesis Report" and submit it to the G20 Finance Ministers and Central Bank Governors Meeting and Summit of Leaders. The next meeting of the group will be held in Sydney, Australia in early June.

It is understood that the predecessor of the G20 Sustainable Finance Research Group is a green finance research group initiated by China during its presidency of the G20 in 2016. The sustainable finance research group still focuses on green finance but will also consider other elements of sustainable development, including employment and income distribution.

Source: Financial Times