Best green finance zone / region 2019
Huzhou city was chosen by the central Chinese government in June 2017 as “a pilot green finance reform and innovation zone”. The city quickly took a top-down approach to accelerating the development of green finance, which has proved to very effective.
Shortly after Huzhou became a pilot green finance zone, the municipal government formulated a strategic plan for green finance development. Huzhou is ahead of other pilot green finance zones by virtue of its set of standards to evaluate green finance applicants, gauge risks and returns of green finance projects and review the performance of local banks in green finance provision.
In particular, the Huzhou city government office overseeing local financial institutions has developed its own information system that deploys big data analysis to discover projects in need of green funding; the office also gives out subsidies for green finance projects based on the system’s projection of potential social and environmental benefits.
To date, the Huzhou government has set up 52 investment funds with a total of Rmb30.4 billion ($4.4 billion) to finance green projects. It has also won the support of the local offices of China’s central bank and banking regulatory bodies.
Thanks to that work, Huzhou has achieved fast, high-quality growth in green finance. At the end of 2018, the total amount of outstanding green loans provided by local banks had risen 23.3% from a year earlier, yet the non-performing loan ratio of their green loans was kept at 0.04%.