Best green policy bank 2017
China Development Bank
China Development Bank was set up by the central Chinese government in 1994 with a mandate to fund domestic infrastructure and other strategic social and economic development projects. In recent years, it has also evolved into a leading green-credit provider in China and a key player in helping government agencies to institute a proper regulatory framework for the rapidly growing domestic green-finance sector.
CDB is by far the largest green-credit provider, not only among China’s policy banks but also in its banking sector as a whole. By the end of 2016, the balance of its green credit amounted to Rmb1.57 trillion ($229 billion) , accounting for 16% of the bank’s outstanding loans, well above the 10% average for China’s banking sector.
The bank is now the most powerful financial backer for the use of alternative and renewable energies in China. The balance of its credit for power generation projects using renewable energies, ranging from wind and solar to refuse incineration power, approached Rmb406 billion by the end of 2016, which was also by far the largest among domestic financial institutions.
While pumping such a huge amount of green credit into various projects across the country, the bank has demonstrated a track record in controlling risks associated with its green credit – the non-performing loan ratio of its green credit stood at 0.11%, which is well below the industry average of over 1.7%.
To support the growth of green finance in China, CDB has long been the main underwriter of green corporate bonds on the domestic market. In 2016, CDB underwrote and issued all the innovative bonds recognized by China’s National Association of Financial Market Institutional Investors in the year.
As a leading policy bank, CDB has also actively participated in the establishment of a proper regulatory framework for green credit in China. It has worked with China’s central bank and banking regulator to draft guidelines and standards on green-credit provision and helped them to install a statistical information system to track green-credit provision in China.
To support environment protection and conserve energy in China, CDB has pledged to offer Rmb1 trillion in green credit from 2016 to 2020, with the aim of increasing the balance of its green credit to Rmb2 trillion by 2020.