The Shanghai Pudong Development Bank has started offering loans using emission permits as collateral, with state-owned power company Huadian getting the first such loan, state media said Tuesday.
Huadian borrowed 10 million yuan ($1.6 million) from the bank, using permits from the Guangdong emissions trading scheme as security, Xinhua’s Economic Information Daily reported.
The new lending policy is the bank’s second move into carbon, following its underwriting of a carbon bond launched last May by China General Nuclear.
A number of China’s commercial banks have launched financial instruments connected to the nation’s emerging carbon market.
The Industrial Bank in November also launched a trading product in Shenzhen linking interest rates and carbon trading revenue.
Huadian, meanwhile, is planning a 2 billion yuan carbon bond for the inter-bank market, underwritten by the China Minsheng Bank.
By Stian Reklev – firstname.lastname@example.org