China was Second-Largest Source of Green Bond Issuance in 2020

Green bonds worth $44 billion were issued by China last year


A report released by Climate Bonds Initiative (CBI) and China Central Depository & Clearing Research Centre (CCDC Research) has said that China was the second-largest source of green bond issuance last year, with a total of $44 billion issued in 2020.

However, the green bond issuance by China in 2020 saw a 21% year-over-year decrease from $55.8 billion. The total outstanding amount of China’s domestic green bond market stood at $139 billion. The labeled green bonds only accounted for less than 1% of China’s overall bond market in 2020.

China’s green bond market slowed in the first six months of last year as the authorities focused instead on COVID-19-related financial instruments. Still, a second-half recovery saw the country again positioned as the number one emerging market economy in green bond issuance.

Chinese offshore bonds issues were dominated by US dollars (USD) at 86%, Euro at 7%, and Renminbi (RMB) at 5%. Hong Kong Exchange (HKEX) remained the largest listing venue for Chinese offshore green bonds, accounting for 54% of the total offshore volume in 2020. London Stock exchange (LSE) was the second, and Singapore Stock Exchange (SGX) third.

Kungfu bonds, which are Chinese bonds denominated in USD and issued offshore, stood at $30 billion, representing 68% of overall Chinese green bonds issued offshore since 2015. Among the 40 green Kungfu bond issuers, the Industrial and Commercial Bank of China (ICBC) is the largest issuer with a total of $6.75 billion issued cumulatively, followed by the Bank of China, with $5.1 billion.

A dim sum bond is an RMB denominated bond issued in Hong Kong. Cumulatively, 1.6 billion Chinese green bonds listed on Hong Kong Exchange are denominated in RMB. Bank of China is the largest green dim sum bond issuer, with three issuances in 2016, 2019, and 2020, respectively.

Panda bonds are onshore RMB-denominated debt issued in China by foreign/overseas issuers. The China Interbank Market is the largest marketplace for green panda bonds, with $571 million. Shenzhen Stock Exchange is the second-largest, with $342 million, followed by Shanghai Stock Exchange at $300 million.

2020 was marked by new developments in China’s profile of issuer types. The most noticeable was the strong growth in the total volume of green bonds issued by government-backed entities that increased by 18%, representing 38% of the total issuance volume in 2020. The largest government-backed entity issuers are local water authorities such as Guizhou Water Investment, Qingdao Water Group, and Hangzhou Water Affairs Group. In 2020, the amount issued by government-backed entity green bonds volume was up 30% from the preceding year.

Beijing Jingneng Clean Energy was the largest non-financial corporate issuer in 2020, with one bond amounting to $2.1billion. The bond’s net proceeds were exclusively directed to financing and refinancing wind and solar projects and supplementing the working capital related to the company’s wind and solar business.

Low Carbon Transport remained the most prominent theme at 30% among bonds aligned with Climate Bonds Initiative’s definition, followed by Energy at 29%. In the meantime, proceeds going to Low Carbon Building assets have seen a surge in both absolute values and shares. In 2020, $5.2billion worth of proceeds were allocated to green building or energy efficiency in the built environment in line with Climate Bond definitions. This more than doubled the volume in 2019 and represented 22% in the overall CBI-aligned green bonds. The other sectors, including water, waste, and land use, have decreased in relative shares and volumes

According to an earlier report by Climate Bonds Initiative, global green bond issuance reached a high of $269.5 billion in 2020, a 1.12% increase compared to $266.5 billion in 2019, thanks to a late surge in the second half of 2020.

Recently, India’s Power Finance Corporation issued its maiden Euro Green Bond of £300 million (~$353 million) under the US Global Medium Term Note Program.


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