Carbon Linked Bond to be Issued by CGN on the Shenzhen Emmission Exchange
Last Monday the city launched its first carbon linked carbon bond financial product on the Shenzhen Emissions Exchange. The bond will be issued by a unit of the China General Nuclear Power Group that will be raising around 1 billion yuan and is said to mature in five years. And Shanghai Pudong Development Bank and China Development Bank are assigned to sell the financial product.
The bond will be issued with an interest rate of 5.65 percent per annum, the future value will be decided using a combination of a fixed rate and floating price of carbon offsets coming from CGN five wind powered generation projects. The average price of carbon offsets in China is around 8 to 20 yuan per ton/hour and is estimated that the China General Nuclear Groups five wind project will generate between 500,000 to 3 million yuan a year in carbon offsets revenue.
The issued bonds can be trade among banks and securities companies and individual traders can buy these bonds through bank financial products in the future, experts say that if financial products are to be copied and expanded in the renewable energy area these can help attract investments that will help develop green industry projects.