A Chinese banking industry insider told SeafoodSource the Bank of China is working to build off its inaugural blue bond offering, issued last year, and widening the scope of which projects can be considered for financing under the metrics of the program, which is intended to support sustainable aquaculture. These discussions have deepened through the closed-door Autumn conference season at China’s state-owned banking sector, the source said.
The Bank of China's blue bonds are aligned with the Green Bond Principles published in 2018 by the International Capital Market Association. Financial experts have long suggested the blue bond label helps projects to promote their environmental merits. The World Bank uses the term “blue economy” to refer to sustainable development of the fisheries and ocean-based renewable energy sectors, as well as other marine industries. Blue bonds have been embraced by Chinese banks as a niche area of expertise and have been used to support a wide range of projects, from wind farms to mariculture with a carbon sequestration component.
The Bank of China’s inaugural dual-currency blue bond offering was initiated by its Macau and Paris branches and was a global first for a commercial bank. It offered USD 500 million (EUR 435 million) of bonds at 0.95 percent due to mature in 2023 and CNY 3 billion (USD 450 million, EUR 390 million) worth of bonds with a coupon of 3.15 percent which are due to mature in 2022.
Blue bonds are mostly likely to favor deep-pocketed Chinese state-owned firms, which have the implicit backing of China’s central government. Many of these large conglomerates have recently bulked up their distant-water and deep-sea fishing fleets.
However, according to the banking insider, many domestic investors remain skeptical of China’s seafood sector, which suffers from a lack of understanding and trust in the Chinese financial community of marine fishery projects, particularly in the wake of scandals such as the wipeout of significant stocks of scallops in the ocean-based mariculture facilities operated by aquaculture firm Zoneco. The circumstances of the write-off of those stocks have been the subject of several legal cases and investigations by China’s securities regulator.
China’s central government has been keen to demonstrate its credentials as a force of positive change in tackling the climate change and biodiversity crises. Last January, the China Banking and Insurance Regulatory Commission (CBIRC) issued a circular encouraging banks it regulates to explore green-minded products like blue bonds.
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