Shandong boosts low-carbon finance

Hengfeng Bank recently issued the first sustainable development-related loan in Shandong province, granting 500 million yuan ($71.33 million) to support the management and environmental protection of the mining area on Fengxian Mountain in Sishui county and bolster the high-quality development of the real economy.

"The sustainable development-related loan is a key product of low-carbon finance and the core mechanism is to adjust the loan interest rate according to performance targets such as pollution reduction, carbon reduction, unit energy consumption and ESG (Environmental, Social, and Governance) ratings," explained Li Shuhao, head of the Jining branch of Hengfeng Bank. "This not only lowers the financing cost of enterprises but also encourages them to accelerate technological transformation and optimize the industrial structures.”

Shandong's three-year action plan on low-carbon finance proposes that the scale of low-carbon bond financing should reach more than 10 billion yuan by the end of 2025.

"Developing transformation finance and enhancing green development is one of our main businesses," said Nie Dazhi, deputy general manager of Hengfeng Bank.

To achieve the dual carbon goals, Hengfeng Bank has launched more than 20 green loan products such as carbon emissions trading pledge loans, emissions credit pledge loans, energy-saving and emission reduction loans, wind power project loans and photovoltaic project loans.

As the only Chinese joint-stock commercial bank that is headquartered in Shandong, Hengfeng Bank has signed strategic agreements with 16 cities in the province and intends to grant more than 800 billion yuan in credit to companies.

One of the companies that have received financing support from the bank is Heze Urban Construction Lvyuan Environmental Protection Technology Co Ltd, which specializes in recycling building materials.

"Recycled stuff can be used as building materials, with a utilization rate of more than 95 percent," said Bian Xuechun, general manager of the company, adding that Hengfeng Bank supported its financing in the early stage.