China- August 22, 2025
In a significant move to accelerate its green transition, China has launched a new pilot program for green foreign debt financing, aimed at attracting global capital into its burgeoning green and low-carbon sectors. Announced by the State Administration of Foreign Exchange (SAFE), the program will be rolled out in 16 provincial-level regions and cities, including major hubs like Beijing and Shanghai. This initiative encourages domestic non-financial enterprises to use cross-border financing to fund qualified green projects, a move that simplifies access to international capital and signals China’s commitment to using financial policy as a key tool in its decarbonization efforts. The program is set to streamline procedures, expand borrowing limits for eligible firms, and is expected to attract billions in foreign investment, further cementing China’s role as a leader in the global green finance market.
Headline Points
* Streamlined Access to Capital: The pilot program simplifies the process for non-financial companies seeking overseas financing for green projects. Under the new rules, registration procedures for foreign debt are streamlined, allowing banks to handle filings directly.
* Expanding Borrowing Capacity: A key feature of the program is its policy to expand the upper limit on cross-border financing for enterprises involved in green and low-carbon initiatives. The new policy will assign a smaller risk-weighted portion to these projects, which will, in effect, allow companies to expand their overall borrowing capacity for their green goals.
* Geographic Scope: The program is set to be implemented in 16 regions, including Beijing, Shanghai, and other provinces and coastal cities known for their economic and industrial weight. This broad geographic rollout demonstrates a comprehensive, top-down strategy to promote green finance across the country.
* Boosting Green Sector Development: The initiative is designed to funnel international capital directly into projects that are aligned with the green finance and low-carbon transformation standards set by Chinese authorities. These include projects related to renewable energy, energy efficiency, and sustainable infrastructure.
* A Long-Term Strategy: This pilot program is the latest in a series of steps China has taken to solidify its green finance market. It complements a broader strategy that has seen China update its green taxonomies, launch sovereign green bonds, and encourage its enterprises to adopt low-carbon technologies, all in an effort to meet its ambitious climate goals.
