Most innovative green bank 2018
Agricultural Bank of China
Agricultural Bank of China wins the green innovation award for becoming the first in China to successfully issue a green credit asset-backed securitization, or ABS, product.
The ABS helped the bank to issue Rmb60 billion ($9.4 billion) in financing for a provincial government-led project that cleaned up heavily polluted waste water in industrial parts of Zhejiang province. Through the successful issuance of this bond, the bank has created a new financing model that uses investment banking tools such as asset securitization to promote the development of green industries across China, says Liu Zhaoying, a senior director with ABC’s investment banking unit in Beijing.
“The successful issuance of this project fully demonstrates the active exploration of ABC’s use of credit asset securitization to proactively manage assets and liabilities,” says Liu. He adds that the bank is exploring more ways to use its investment banking tools to promote green finance.
“Green finance has always been an important part of our bank,” says Liu, adding that the bank’s roots go back to funding China’s agricultural and forestry industries. “You can see even our logo is green.”
The bank recently helped China Resources Capital Holdings to issue Rmb1.35 billion-worth of asset-backed notes, with the proceeds to help the firm finance several wind and green energy projects initiated by small and medium-sized enterprises, Liu notes.
The bank has issued Rmb35 billion-worth in total of green bonds and various other instruments to help non-financial institutions to raise funds for green projects, he says.
ABC also recently began a three-year strategic review exploring other possible forms of innovation that may help to expand the green finance business, says Liu, adding that the strategic review goes all the way down to every one of the bank’s 23,000 branches.
“Our ultimate goal is to make every product green,” he says.
The bank recently brought in the Beijing Environmental Exchange to train staff on developing products using carbon credits.