Global Politics Explainer

CWA # 1698
Global Politics Explainer
China’s debut Global Green Sovereign Bond

Gauri Gupta
6 June 2025

Photo Source:

On 02 April 2025, China's Ministry of Finance (MoF) issued the first sovereign green bond. The bond amount stands at USD 824 million yuan-denominated bond and is traded on the London Stock Exchange

What is the background?
The framework of China’s debut global green sovereign bond aligns with the China Green Bond Principles (2022 Edition) and the International Capital Markets Association (ICMA) Green Bond Principles (2021 Edition). The China Green Bond Principles (2022) highlights project classification, information disclosure, third-party verification, and post-issuance reporting, while the ICMA framework is structured around four key pillars: allocation of proceeds, procedures for evaluating and selecting projects, oversight and management of the funds raised, and transparent reporting practices. 

The integration of national and global frameworks is expected to help China channel financial resources into well-defined green projects, including the development of renewable energy, pollution reduction, and conservation of biodiversity. It synchronizes global investor expectations concerning the mitigation of climate risk. The sovereign bond framework includes clear metrics, such as energy saved per unit of GDP and COâ‚‚ emissions reduced per yuan invested, providing quantifiable outcomes. This dual alignment boosts the credibility and foreign acceptability of China's green finance product.

What are the components of this bond?
The Ministry of Finance (MoF) had released a Framework for Sovereign Green Bonds on 20 February 2025. It constitutes four pillars which guarantees its consistency with targets for environmentally sustainable development and open financial practices.

First, the proceeds will be applied only towards the six pre-specified environment sectors: clean transport, sustainable water and wastewater management, sustainable restoration and management of Land and natural resources, marine ecosystems conservation and restoration, pollution prevention and control, resource efficiency and recycling. The MoF will invest these funds to cover various fiscal budgetary costs for eligible green projects, either green new projects or existing ones. Direct investments, project operating costs, intergovernmental capital transfer, and tax refunds are all included in the framework.

Second, the MoF will be tasked with choosing and assessing green projects. A Green Expenditures List shall be formally set to determine whether projects are eligible. Disbursements will only be made by the needs of the bond and China's environmental policies. Regular reviews and annual disclosure will be done for maintaining compliance.

Third, the MoF will maintain an in-house register system to track the disbursal of proceeds to qualified expenditures for accountability purposes. Any proceeds that will not be disbursed at once will be kept according to the MoF's treasury, and this will not be invested in energy and pollution-consuming projects or fossil fuel resources. All of these proceeds will be disbursed in full in the current fiscal year, the next fiscal year, or a maximum of three previous fiscal years. At least half of the proceeds will be invested in green projects during the current or next fiscal year.

Fourth, the MoF will release the public annual report of the utilization of the proceeds on its website. The Ministry will be given periodic and timely information in the case of material events for funded projects. The disclosures will cover information on the quantifiable environmental effects of funded activities and proceeds distribution.

What does the above mean?
China has issued green bonds denominated in RMB. It is expected to encourage the growth of responsible financing and cross-border green investment by ensuring high transparency and adhering to international standards. It is also expected to increase confidence among investors and is also a price reference for future RMB green bond issuances. It is also expected to spur banks, companies, and local governments to search for green financing avenues and join the green bond market. It also encourages more foreign capital to flow into projects related to ecological restoration, clean energy, renewable energy, and resilience to climate change. 

About the author

Gauri Gupta is a Research Intern at NIAS.

PREVIOUS COMMENTS

February 2026 | CWA # 1959

Yesasvi Koganti | Yesasvi Koganti is an undergraduate student from Madras Christian College, Chennai.

UK and China
February 2026 | CWA # 1957

R Preetha | R Preetha is pursuing post-graduation in the Department of International Studies, Stella Maris College, Chennai, and is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.

The India–US interim trade framework
February 2026 | CWA # 1956

Lekshmi MK | Lekshmi MK is pursuing post-graduation in the Department of Political Science, Madras Christian College, Chennai, and is a Research Assistant at the National Institute of Advanced Studies, Bengaluru.

End of the New Strategic Arms Reduction Treaty (START)
State of Global Politics 2025
December 2025 | CWA # 1931

Padmashree Anandhan

NATO Summit 2025
State of Global Politics 2025
December 2025 | CWA # 1924

Padmashree Anandhan

NATO Summit 2025
This Week in History
August 2025 | CWA # 1801

R Preetha

28 August 1963
TWTW note
August 2025 | CWA # 1780

Abhiruchi Chowdhury

Trump tariffs:
This Week in History
August 2025 | CWA # 1778

Lekshmi MK

28 July 1914
TWTW Note
June 2025 | CWA # 1694

Aashish Ganeshan

The US:
CW Note
May 2025 | CWA # 1689

Padmashree Anandhan

Ukraine
CW Note
May 2025 | CWA # 1688

Ayan Datta

Gaza
CW Note
May 2025 | CWA # 1675

Lekshmi MK

Turkey:
CW Note
May 2025 | CWA # 1673

Padmashree Anandhan

Ukraine:
TWTW Note
May 2025 | CWA # 1667

R Preetha and Brighty Ann Sarah

East Asia:
NIAS Global Politics Database
March 2024 | CWA # 1251

NIAS Africa Team

Africa This Week
NIAS Global Politics Database
February 2024 | CWA # 1226

NIAS Africa Team

Africa This Week
The World This Year
December 2023 | CWA # 1189

Hoimi Mukherjee | Hoimi Mukherjee is an Assistant Professor at the Department of Political Science in Bankura Zilla Saradamani Mahila Mahavidyapith.

Chile in 2023: Crises of Constitutionality
The World This Year
December 2023 | CWA # 1187

Aprajita Kashyap | Aprajita Kashyap is a faculty of Latin American Studies, School of International Studies at the Jawaharlal Nehru University New Delhi.

Haiti in 2023: The Humanitarian Crisis
The World This Year
December 2023 | CWA # 1185

Binod Khanal | Binod Khanal is a Doctoral candidate at the Centre for European Studies, School of International Studies, JNU, New Delhi.

The Baltic: Energy, Russia, NATO and China
The World This Year
December 2023 | CWA # 1183

Padmashree Anandhan | Padmashree Anandhan is a Research Associate at the School of Conflict and Security Studies, National Institute of Advanced Studies, Bangaluru.

Germany in 2023: Defence, Economy and Energy Triangle
The World This Year
December 2023 | CWA # 1178

​​​​​​​Ashok Alex Luke | Ashok Alex Luke is an Assistant Professor at the Department of Political Science at CMS College, Kottayam.

China and South Asia in 2023: Advantage Beijing?
The World This Year
December 2023 | CWA # 1177

Annem Naga Bindhu Madhuri | Annem Naga Bindhu Madhuri is a postgraduate student at the Department of Defence and Strategic Studies at the University of Madras, Chennai.

China and East Asia
The War in Ukraine
October 2023 | CWA # 1091

Annem Naga Bindhu Madhuri

Issues for Europe
IPRI Quarterly Forecasts I Triggers, Trends, and Trajectories
July 2023 | CWA # 1012

Bibhu Prasad Routray

Myanmar continues to burn
2022: The World This Year
December 2022 | CWA # 879

Padmashree Anandhan

The Ukraine War
Europe: Heatwaves, Wildfires, Droughts, and Ice Melt in Alps
November 2022 | CWA # 838

Rishma Banerjee

Tracing Europe's droughts
NIAS Africa Weekly
March 2022 | CWA # 705

NIAS Africa Team

In Focus: Libya
The World This Week: 150th Issue
December 2021 | CWA # 630

GP Team

Europe in 2021
Pakistan Reader
October 2021 | CWA # 588

Abigail Miriam Fernandez

TLP is back again
NIAS Fortnightly on Science, Technology & International Relations
August 2021 | CWA # 528

STIR Team

Space Tourism
Science, Technology and International Relations
September 2019 | CWA # 162

Lakshman Chakravarthy N

5G: A Primer
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 71

Mahesh Bhatta | Centre for South Asian Studies, Kathmandu

Nepal
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 70

Nasima Khatoon | Research Associate, ISSSP, NIAS

The Maldives
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 69

Harini Madhusudan | Research Associate, ISSSP, NIAS

India
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 68

Sourina Bej | Research Associate, ISSSP, NIAS

Bangladesh
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 67

Seetha Lakshmi Dinesh Iyer | Research Associate, ISSSP, NIAS

Afghanistan