ICBC plans to issue green bonds as China eyes clean environment

[BEIJING] Industrial & Commercial Bank of China Ltd plans to issue green bonds, becoming the latest entrant to a market that barely existed a few years ago.

The plan comes after China authorized the first sales of the securities in December, Zhou Yueqiu, head of ICBC's urban finance research institute, told reporters after a conference in Shanghai on Thursday. Zhou didn't provide details on the amount or timing of the offer.

Bonds are typically considered "green" if they help fund developments that save energy, curb pollution and recycle resources, as well as clean transportation and renewable energy projects. Shanghai Pudong Development Bank Co. and Industrial Bank Co raised a total of 30 billion yuan (S$6.5 billion) last month in the nation's first domestic green bond sales.

ICBC had 702.8 billion yuan of outstanding green loans at the end of 2015, said Zhou. Non-performing loans accounted for 0.44 per cent of that, he said. That compares with a ratio of 1.44 per cent for the bank's total loans as of the end of the third quarter, according to Bloomberg data.

In a sign of further development in green lending, the National Association of Financial Market Institutional Investors is studying guidelines for green bonds, Ma Jun, chief economist in the research bureau at the People's Bank of China, said on Thursday.

The market for green bonds may exceed US$50 billion for the first time this year, spurred by the Paris Agreement to tackle climate change brokered by the United Nations in December, Moody's Corp said earlier this month.

BLOOMBERG