CDB successfully issued green financial bonds exclusive for building low-carbon transportation systems

China Development Bank (CDB) successfully issued “Bond Connect” special green finance bonds for “building low-carbon transportation systems”, amounting to 15 billion yuan, to investors all over the world in the national inter-bank bond market of China. The 3-year duration bonds, with a coupon rate of 2.91% and a subscription rate of 4.32, won great support of investors both at home and abroad. CDB has accumulatively issued 10.5 billion yuan of green finance bonds so far, with a balance of 95 billion yuan, ranking the first in across the country.

The fund raised through the bonds will be invested in the green upgrade of the service infrastructure to mainly support the green projects in fields such as public transportation and operation which is expected to bring remarkable carbon emission reduction. It will be used to optimize the transportation structure and promote energy-saving, low-carbon vehicles to encourage low-carbon transportation. The fundraising projects all meet the requirements of the Green Bond Endorsed Projects Catalogue (2021), the Green Bond Principles (GPB, June 2021), and the Climate Bonds Standard (CBS, 3rd Edition) and they have passed the independent third-party assessment and certification and obtained the certification label of the Climate Bonds Initiative (CBI). These projects are expected to reduce the carbon dioxide emission by 21,500 tons and save coal equivalent by 10,500 tons on an annual basis.

With the support and guidance from the People’s Bank of China (PBC), CDB joined hands with China Foreign Exchange Trade System and Shanghai Clearing House and provided trading services such as pre-issue and standard bond forward services for the market players in the issuance of the bonds, which diversified the trading strategy portfolio, enhanced the price discovery function and realized transaction pricing and risk management throughout the life cycle of the bonds. It was helpful to contribute to improve the market liquidity and expand both the extent and depth of green financial bonds.

Next, CDB will continue to leverage its advantages to facilitate the innovation and improvement of the product mechanism of the green bond market and diversify the green financial products, so as to lead more private funds to the green and low-carbon industry.