Jiangsu launches ‘green loans’ to fund pollution fight

East China’s Jiangsu Province, a major manufacturing region in the Yangtze River Delta, has launched an 8 billion yuan ($1.2 billion) environmental credit fund to help promote green development and fight pollution, local government authorities said.

Jiangsu, which neighbors China’s financial center of Shanghai, has been one of the focal points of the country’s environmental clean-up efforts since 2013.

The provincial government has provided 400 million yuan to launch the new fund, with an initial 8 billion yuan of extra financing to be offered through banks, the Jiangsu environmental protection bureau said in a notice.

The new fund will be used to help finance environmentally friendly projects, with each approved project allowed to borrow a maximum of 20 million yuan.

The loans must be paid back within five years, and the interest rate will be determined by the “environmental credit rating” of the enterprise involved, the notice said.

In a document published in June, China’s cabinet, the State Council, said it would devise new policies to encourage the development of green financing, and it also promised to establish a State “green development fund.”

In 2017, China ranked as the second-largest green bond issuance country in the world, with its green bond market increasing 4.5 percent year-on-year to $37.1 billion, according to a report jointly released by Londonbased nonprofit group the Climate Bond Initiative and China Central Depository & Clearing Company.