Agricultural Bank of China lists first green bond on London Stock Exchange

Agricultural Bank of China (ABC) green bond was listed on the London Stock Exchange (LSE) Thursday.

Liu Shiyu, chairman of ABC, and Xavier Rolet, CEO of London Stock Exchange Group, attended the event marking the LSE listing where they signed a green finance cooperation memorandum of understanding (MoU).

The 1 billion U.S. dollars equivalent climate bond is the first green bond issued by a Chinese financial institution and the first green bond denominated in renminbi (RMB) issued by an Asian issuer.

"The successful issuance and listing of ABC's green bond on the LSE not only fulfills our ambition that was announced as part of the latest UK-China economic and financial dialogue, but also manifests the close and fruitful cooperation between Chinese and UK financial institutions on green finance, climate change and adaption initiatives," said Liu.

"ABC's successful green bond listing confirms the resiliency of the ever closer links between London and China. We are committed to working together with ABC to build a vibrant international market in London for Chinese green finance," said Rolet.

A green bond is an innovative financing method used around the world, directing financial resources to environmental protection industries and projects. Approximately 140 institutional investors took part in the bid, among which over 10 percent are based in Europe and the Middle East. Seventy-five percent are banking investors and 25 percent are from funds, private banking and other investors.

Proceeds of the bonds will be used in green projects such as clean energy, biomass power generation, urban waste and sewage disposal.

"Green bonds are already beginning to expand beyond the pioneering European and U.S. markets to new markets like China, where the government already strongly committed to reform its bond markets and develop green financial products. It is well-recognized that China's bond market offers huge potential for foreign firms' investment and as such offers a promising platform to support the global development of green bonds alongside other asset classes," Mark Boleat, policy chairman of the City of London commented.

The two companies said they would take the first green bond transaction as an opportunity to normalize the issuance of green bonds in the international market, establish relevant standards and protocols, and popularize the green finance concept. As well, the transaction is hoped to promote awareness among financial institutions and corporate clients and make a greater contribution to the development of green industries worldwide.

ABC is one of the first standing members of the green finance committee of China Society for Finance and Banking. In 2013, ABC signed the green credit commitment along with other financial institutions, and formulated green credit standards and protocols.