Chinese banks plan to expand their lending to green and low-carbon initiatives, following a push from China’s financial regulators.
A recent survey from China Securities Journal found that many banks currently consider the green low-carbon sector to be a key area for credit extension, and that growth of green loans is expected to accelerate.
“We have expanded the intensity of loan support for environmental protection, clean energy and other green sectors,” said an executive from the Beijing branch of a big state-owned bank.
“At the same time, we are providing special lending products to enterprises that require technological improvements for energy efficiency, carbon reduction and emissions reduction, and increasing related quotas.”
“Green sector clients are a key area of contention,” said another executive at the operations department of a joint-stock lender in Beijing.
“For enterprises that satisfy green loan approval conditions and national strategic development requirements, we provide interest rate discounts of 50 – 100 basis points.”
In 2020 Beijing unveiled the carbon mitigation targets of achieving peak carbon by 2030 and carbon neutrality by 2060. The People’s Bank of China (PBOC) subsequently launched a nation-wide drive to increase green finance at the start of 2021.
As of the end of the second half of 2022 China’s domestic and foreign currency green loan balance stood at 19.55 trillion yuan, for a year-on-year increase of 40.4%, and growth 29.6 percentage points ahead of growth in overall lending