Notice on Refining the Mechanism for Green Bond Issuances by Overseas Institutions in the Interbank Bond Market

All market participants,

　　To implement the decisions of the Central Financial Work Conference regarding the promotion of green finance and to advance the high-quality opening-up of the interbank bond market, the National Association of Financial Market Institutional Investors has refined the mechanism for green bond issuances by overseas Institutions in the interbank bond market (hereinafter referred to as "Green Panda Bonds"), to streamline and standardize the registration and issuance processes for Green Panda Bonds. This Notice is hereby promulgated to set out the relevant matters as follows:

　　I. Criteria for Green Project Recognition

　　The criteria for green projects under Green Panda Bonds should follow the Green Bond Endorsed Projects Catalogue (2021 Edition) (No. 96 [2021], PBOC), the Common Ground Taxonomy: Climate Change Mitigation, the EU Taxonomy Climate Delegated Acts, and other relevant international green industry classification standards. Reputable green bond issuers including foreign governmental agencies and international development institutions (hereinafter referred to as the "two types of institutions") may adopt the green project categories outlined in the Green Bond Principles (GBP) published by the International Capital Market Association (ICMA).

　　II. Use of Green Bond Framework [1]

　　Overseas non-financial enterprises with good reputation and experience in issuing green bonds on the international markets (hereinafter referred to as “reputable overseas entities”) [2], along with the two types of institutions, are allowed to issue Green Panda Bonds under their existing green bond frameworks. A green bond framework should include the four core elements outlined in the China Green Bond Principles: (a) use of proceeds, (b) project evaluation and selection, (c) management of proceeds, and (d) ongoing information disclosure.

　　For a reputable overseas entity, if the standards for defining green projects set out in its green bond framework do not include the Green Bond Endorsed Projects Catalogue (2021 Edition) (No. 96 [2021], PBOC), the Common Ground Taxonomy: Climate Change Mitigation, or the EU Taxonomy Climate Delegated Acts, at least one of the standards listed above must be supplemented in its issuance documents. Its green bond framework should be disclosed as part of the registration and issuance documents and disclosed on the interbank bond market.

　　III. Project Evaluation and Selection

　　For reputable overseas entities and the two types of institutions using their green bond frameworks, if no specific green projects have been identified prior to the issuance, they should clearly define the process for evaluating and selecting green projects in the issuance documents.

　　IV. Management of Proceeds

　　The two types of institutions must manage their green bond proceeds through setting up a designated ledger or in other appropriate manners, and ensure, through the issuer’s formal internal process, to use the proceeds to finance eligible green projects. The proceeds of Green Panda Bonds can be managed on a bond-by-bond basis or collectively for multiple green bonds forming a funding pool. For overseas non-financial enterprises managing the proceeds of their Green Panda Bonds through an escrow account, the NRA account may be used as the escrow account. If proceeds are to be used abroad and an overseas bank account cannot be used as an escrow account for this purpose, the issuer should properly retain the overseas bank records evidencing fund transfers or other supporting documents, such as a ledger designated for green funding.

　　V. Ongoing Information Disclosure

　　Reputable overseas entities and the two types of institutions issuing Green Panda Bonds under their green bond frameworks are required to disclose use of proceeds, the progress of the green projects, and the expected or actual environmental benefits on an annual basis, and encouraged to disclose such information on a semi-annual or quarterly basis. The timeframe for such ongoing disclosure should be specified in their registration and issuance documents. Annual disclosure documents can be prepared with reference to the relevant contents of the Ongoing Information Disclosure Guidelines for Green Bonds.

　　VI. Evaluation and Certification Reports

　　Issuers are encouraged to engage independent third-party evaluation and certification agencies to provide assessment and certification on green bonds. Issuers are also encouraged to regularly disclose evaluation and certification reports issued by third-party agencies, which should be based on the ongoing assessment and certification on the progress of the green projects financed by the green bonds and the actual or expected environmental impact of such projects.

　　This notice shall take effect as of the date of its promulgation.

　　National Association of Financial Market Institutional Investors

　　February 18, 2025

[1] The term “green bond framework” includes sustainable development bonds/finance frameworks that encompass green bonds.

[2] If an overseas parent company (guarantor) provides an unconditional, irrevocable guarantee (constituting “joint liability guarantee” under the PRC Civil Code) for its wholly-owned subsidiary (issuer) that is responsible for financing the group, and the guarantor has issued green bonds or has provided unconditional, irrevocable guarantees for green bonds issued by its wholly-owned subsidiaries responsible for financing, and if the guarantor has a good reputation, it is also considered a reputable overseas entity.

(The English version is used for reference only. Should there be any conflicts between the English version and the original text in Chinese, the Chinese version shall prevail.)

Chinese Version：https://www.nafmii.org.cn/ggtz/tz/202502/t20250219_321382.html