China issued the first batch of 85.5 billion yuan ($13.4 billion) in low-cost loans to financial institutions to promote green projects and corporate efforts to reduce carbon emissions, the Asian country’s central bank said. this Thursday (30).
Under the Carbon Emissions Reduction Facilitation Mechanism (Cerf), the first of its kind launched by the People’s Bank of China (PBoC), financial institutions can apply for low funding cost to support companies’ carbon emission reduction efforts.
Cerf is part of China’s broader goal of reducing carbon emissions by 2030 and achieving carbon neutrality by 2060, as well as protecting the economy from the economic consequences of the Covid-19 pandemic.
Under Cerf, the PBoC will provide financial institutions with resources equivalent to 60% of the principal of a loan at a one-year interest rate of 1.75%. This implies a discount to the reverse repurchase interest rate of 2.2% in seven days.
The bank has also officially launched low-cost loans to support companies’ efforts to use clean coal, Sun Guofeng, head of the PBoC’s monetary policy department, told a news conference. He did not say how much has already been provided.
Cerf could lead to investment of 1 trillion yuan a year in clean energy-related projects once the monetary tool is fully implemented in 2022, according to reports by Huatai Securities and Everbright Securities.
(Por Ma Rong, Cheng Leng e Gabriel Crossley)
((Translation of the São Paulo Newsroom, 55 11 5047 2838))
REUTERS PVB IV
Reference: CNN Brasil
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