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Green Bonds

  1. Climate Change
  2. Green Bonds

The fund of green bond can be used for the existing fund or a new capital expenditure. Similar with the traditional refinancing process, the fund of green bonds can be used as existing fund, such as the operating solar power station. For example, the solar power company can issue green bonds to refinance the existing fund, and then use it to build a new station. The fund can also be used for capital investment in the future, as long as it is fully and effectively used at a reasonable time (the longest duration is two years according to the climate bond standard).

The benefits of the green bonds can support the following aspects

  • Searching for various inspectors
  • Extent the term of maturity
  • Keep close contact with and gain a higher loyalty of the investor
  • Set up the position as a market leader

Bond Issuance should get the Approval from the Following Regulator

  • Municipal Bonds: Ministry of Finance
  • Corporate Bonds: Approved by National Development and Reform Commission
  • Enterprise Bonds: China Securities Regulatory Commission
  • Medium Term Note and Commercial Paper: Registration in National Association of Financial Market Institutional Investors
  • Private Placement Bonds of Small-and-medium-sized Enterprises: Registration in Stock Exchange
  • Confirm the structure of the bank through the cooperation with the investment bank or consultant, dredit rating maybe needed

How to issue Green Bonds

Identify Green Property and Projects

E.g. renewable energy, clean water resource and public transportation.

Demonstrate if the property or project is consistent with the green standards according to the China Banking Regulatory Commission or International Climate Bonds Standard.

Independent Audit

Reliable independent audit and verification will maintain reputation. The auditor can also help to identify the green property.

For more information: climatebonds.net/China

Set up a Tracking and Reporting System

The total value of assets or projects should be equal or exceed the gross value of the bonds. It is really important for the transparency, the issuer should not only track it, but also explain how to track.

Regular Report

Confirm the fund is properly allocated to the green projects.

It can be a letter provided by the company's internal auditor or signed by an authorized person.

How to certificate Green Bonds

Preparation of the Issuer

  • Set up internal process
  • Select projects
  • Track the fund
  • Reporting
  • Project qualification
  • The catalogue of the green bonds' supporting projects
  • Industry-specific standards according to the climate bond standard
  • The key supported projects of National Development and Reform Commission
  • Approval
  • Obtain the approval from the relevant organizations of bond issuance

Assessment from the Auditing Body

  • Pre-issuance audit
  • Preparation of the issuer
  • Project qualification
  • Post-issuance audit
  • Use of the fund
  • Project qualification
  • Reporting

Verification and Issuance

  • The green bond is certificated and be published in markets

Certification Process

  • Confirm the qualified projects and property

Pre-issuance

  • Audit organization: assessment according to the pre-issuance requirements (a fast, simple way)
  • Issuer: Submit authorized protocol and audit report  to CBSS.
  • CBSS: Confirm the climate bond verification of the bond to be issued.
  • Issuance

Post-issuance

  • Audit organization: make sure that the bond meets the post-issuance requirement
  • Issuer: Submit audit report to CBSS.
  • CBSS: Confirm the climate bond verification of the bond to be issued.

Mr. Yongjun Li

General Manager
Renewable Energy, Climate Change

8621 - 53855353 - 1528

yli@tuv-nord.com