Abstract
The power industry in China is accelerating the pace of transition to green and low-carbon industry. Among the many factors restricting its green transformation, funding constraints are particularly prominent. On the one hand, the financing channels are too single for the reasons that the construction of power projects has long been relied on the government grants and bank loans. On the other hand, the term of power investment project is too long while the term of borrowings is too short, leading to the term mismatch. Green bonds have the characteristics of long maturity, low cost and quick review, which can alleviate the difficulties in the financing of the power industry. Therefore, it can be a good choice for power companies to use green bonds as an innovative financing tool to ease funding pressure. This paper takes the largest green energy company in China, Three Gorges Group, as an example, analyzing the financing behavior of issuing green bonds in the aspects of issue motivation and benefits. Based on the case, the paper draws conclusions that green bonds financing can be a proper use of green policies and it has obvious financing cost advantages. Finally, this paper contributes suggestions from the perspective of investors, enterprises and government to promote the healthy development of green bonds.
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