China offers banks cheap funding for lending to green firms

The central bank is willing to lend 60% of the required funds at a 1.75% rate.

The People’s Bank of China (PBOC) will lend cheap funding to banks for loans to firms that are working towards the country’s goal of reducing carbon emissions, reported Bloomberg, based on a statement released by the central bank.

The central bank said that it will lend 60% of the required funds at an interest rate of 1.75%. Banks can then use the money to provide loans at around the level of the loan prime rate.

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The financing aims to support companies in clean energy, energy-saving and environment-friendly sectors, as well as those with carbon emission reduction technology.

The funding is especially aimed at supporting earlier-stage firms.

PBOC will require public disclosure of the use of the loans and quantification of the emissions reduced with the funding.

Here’s more from Bloomberg.