Agricultural Bank of China
In terms of green finance, Agricultural Bank of China was the least advanced of China’s four state-owned commercial banks until relatively recently. But thanks to some nimble steps taken in the last two years, the world’s third-largest bank by assets has not only gained access to the international green-bond market, but has also emerged as a big green-credit provider in China.
ABC became the first Chinese bank to issue green bonds on the international market in 2015, floating green bonds totalling $1 billion in London. It has also quickly expanded industry coverage for its green-finance business. By the end of 2016, the bank had made its green credit available for projects in up to 20 industries in China.
As a result, the balance of its green credit exceeded Rmb649.4 billion ($94.5 billion) by the end of 2016, a jump of 19.6% from a year earlier.
What has also set ABC apart from other large Chinese commercial banks in green finance is its management’s recognition that the quality of growth is at least as important as the raw numbers, prompting it to sign a partnership deal in April 2016 with the International Finance Corporation, a global leader in promoting innovation and international best practices in green finance.
Under the agreement, the IFC will advise the bank on developing an innovative programme to build a green-finance portfolio of up to $23 billion. The programme aims to reduce greenhouse emissions by 50 million metric tons a year over the next three years, which is tantamount to taking more than 10 million cars off the road.
The partnership has already started generating impressive results. With the IFC’s support, ABC organized the issuance of green corporate asset-backed securities for Gold Wind Science and Technology Co., China’s largest wind-turbine manufacturer, on the Shanghai Stock Exchange in August 2016. The securities are the first batch of corporate green ABS ever issued in China.
By engaging the IFC as a strategic partner and adviser and leveraging its own extensive network in China’s vast rural regions, where green finance is badly needed for water conservation and renewable energy development, ABC, under chairman Zhou Mubing, is well placed to play an even more important role as a green-finance provider in future.