NDB to issue 3 bn yuan worth green bonds in China

The Dollar Business Bureau

The New Development Bank, founded by BRICS, is planning to issue the first batch of green bonds in China by next week. The bank, seeking to promote growth of green finance in BRICS member nations, will release the first batch in interbank bond market of China.

The green finance worth 3 billion yuan ($448.37 mn) will be issued on July 18. The bonds with 5-year-tenor will likely bear interest rate ranging from 2.8% - 3.6%.

It will be the first such issuance of green finance under the guidelines set by Central Bank of China.

While the joint underwriters for the issue include China Construction Bank Limited, Standard Chartered Bank Ltd of China, Industrial and Commercial Bank of China Limited and China’s HSBC Bank Company Limited, the lead underwriter for the issue is Bank of China.

The bond proceeds will be utilized to finance green projects of BRICS nations. The green projects, which pass through the criteria framed by NDB and domestic rating agencies, will be financed by the funds raised through green bonds.

Chinese project focusing on research of solar energy in Shanghai, four renewable energy projects in India, China, Brazil and South Africa were recently approved by NDB.

In an effort to wider its access to global capital markets, NBD aims to secure an international credit rating, said Leslie Massdorp, NDB’s CFO.

The bank also has plans to issue bonds in other member currencies to alleviate the risk of foreign currencies from funded infrastructure projects.

The BRICS nations, which grouped in 2009, signed a treaty for NDB, formerly known as BRICS development bank in 2014. The NDB, headquartered at Shanghai, began its operations in 2015.