1.6 b-yuan loan secured by Guiyang SOE project for carbon reduction

The State-owned Guiyang Industrial Investment Co has announced that its subsidiary, Guiyang Kaiyang Yangtai Thermal Power Co, has secured a 1.6-billion-yuan ($220.37 million) long-term sustainable development-linked syndicated loan.

This funding will support the construction of a cogeneration and auxiliary project in the Kaiyang Industrial Park in Guiyang, capital city of Southwest China's Guizhou province.

This project, the first cogeneration project in Guizhou province, employs clean and efficient heating units, aligning with the "carbon neutrality and carbon peak" goals for energy conservation and emission reduction.

With a total investment of approximately 2 billion yuan, the first phase of the project is expected to supply about 4.1 million metric tons of steam and approximately 700 million kilowatt-hours of electricity annually. It will mainly provide heating to new energy materials and other industrial enterprises in the Kaiyang Industrial Park, with an estimated average annual sales revenue of around 1 billion yuan.

The loan agreement was signed by Guiyang Kaiyang Yangtai Thermal Power Co in collaboration with the Guizhou branch of the China Development Bank, along with China Construction Bank, China Minsheng Bank, and Guizhou Bank. This loan represents the largest and longest-term sustainable development-linked syndicated loan in China to date.

Sustainable development-linked loans are a financial tool that has emerged in the context of global efforts to combat climate change and promote carbon neutrality. This loan ties the cost of borrowing to the borrower's performance on agreed environmental, social, and governance (ESG) targets, helping companies achieve their goals of low-carbon transition and sustainable development. They offer advantages such as large loan amounts, long terms, and relatively low funding costs.