A power producer in the city of Tianjin has issued "green bonds" worth 1 billion yuan ($150 million) to finance a 2,000-MW coal-fired power plant, a move slammed by an environmental group for diverting funds from cleaner projects, Reuters reported.
Tianjin SDIC Jinneng Electric Power Co Ltd announced that it had registered the short-term "green bonds" on the interbank market and would complete the sale in the third quarter of this year. It said it was the first "green bond" of its kind to be launched by China's thermal power sector.
The bond sale will be used to pay back loans used to build two 1,000-MW ultra-supercritical coal-fired generation plants, the company said in a statement.
China has been promoting new financing methods to help pay for the country's transition to cleaner modes of growth. In June, it launched five "green finance" pilot zones, where at least 3 trillion yuan a year will be spent over 2016-2020 to cut pollution and greenhouse gas emissions.
"The company's registration and issuance of the green bonds has driven forward the green, circular and low-carbon development of the Beijing-Tianjin-Hebei region," Tianjin SDIC said in its statement.
Supercritical technologies use high temperatures and pressure levels to improve power generation efficiency, cutting fuel consumption and reducing emissions. Many such plants have been financed using the United Nations' "Clean Development Mechanism" aimed at funding carbon-cutting projects.
China aims to reduce the share of coal in its total energy mix from 64% in 2015 to 58% by 2020, but absolute consumption is still expected to rise over the period. To compensate, regulators have been trying to encourage lower-emission coal-fired power generation technologies through subsidies and preferential financing policies.
Clean coal was listed in the catalogue of sectors eligible for green financing published in late 2015. The list included ultra-supercritical co-generation power plants with capacity of 300 MW or more.
But the inclusion of coal has been criticised by environmental groups, who say it diverts investment from renewables.
"The 'clean' in clean coal is a relative term. Technology such as ultra-low emissions, albeit producing less air pollutants, is not a solution to lowering the carbon emissions that endanger our climate," said Huang Wei, a climate and energy campaigner with Greenpeace East Asia in Beijing.
"It is unwise to use green bonds to support any coal projects, especially coal power and coal chemical projects," she said.
(Writing by Jessie Jia Editing by Harry Huo)
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