A Case Study Of Carbon Neutral Bonds Issuance By Huaneng Power International,Inc

In September 2020,China announced to the world at the general debate of the 75 th United Nations General Assembly that my country will strive to achieve carbon peaking by2030 and carbon neutrality by 2060(the "two-carbon" goal).How to deal with climate change has gradually become an important part of building a community with a shared future for mankind,and the "two-carbon" goal has become a key area of the overall layout of my country’s ecological civilization construction.Carbon-neutral bonds have been heatedly discussed in the market once they are proposed.Compared with other green bonds,they have the characteristics of more focused use of funds in the field of carbon emission reduction,quantifiable environmental benefits,and more detailed information disclosure.Carbon-neutral bonds respond to the requirements of the national low-carbon development goals,and play their advantages in direct financing support,price discovery mechanism,and optimal allocation of resources to guide and promote more funds to be invested in low-carbon fields.This thesis selects the first green medium-term note "21 Huaneng GN001"(carbon-neutral bond)issued by Huaneng Power International,Inc,which is also one of the first carbon-neutral bonds in my country,as a case study.It first introduces the background of Huaneng International’s issuance of carbon-neutral bonds,the basic terms of the bonds and the use of raised funds,and then introduces the motivation for the company’s issuance of carbon-neutral bonds from the perspectives of external macro and internal development.On the one hand,under the macro background of the "dual carbon" goal,in order to achieve self-development faster,Huaneng International needs to issue carbon neutral bonds to respond to the call for sustainable development and enhance the company’s reputation for social responsibility;on the other hand,the company In order to continuously promote the upgrading of green industries,new energy projects generate a large amount of capital demand.Due to the low financing cost of carbon-neutral bonds and flexible bond maturity allocation,the issuance of carbon-neutral bonds has naturally become an ideal choice for green project financing.Then,from the perspective of the carbon neutral bond’s support for Huaneng International,the economic,financial,stock price and social effects brought by the company’s issuance of carbon neutral bonds are analyzed.The main conclusions include the following aspects:(1)Economic effects aspect.The company can not only obtain electricity sales revenue,but also the potential value of carbon emission rights in the environmental benefits realized by project emission reduction.Quantitative analysis based on the real option method shows that green projects can theoretically generate considerable environmental benefits;(2)stock price effect aspect.The event research method used in this thesis shows that the issuance of carbon neutral bonds actually has a short-term positive effect on the company’s stock price;(3)In terms of financial effects.The issuance of carbon-neutral bonds is conducive to reducing corporate financing costs and improving debt financing structure,thereby enhancing the short-term solvency of companies,and helping to alleviate the problem of green project maturity mismatch.However,from an operational point of view,whether the company can timely convert the funds raised from the bonds into the company’s actual assets can determine whether the issuance of carbon neutral bonds can improve long-term operating conditions and enhance comprehensive financial performance;(4)In terms of social effects.Huaneng International company.realized financing by issuing carbon-neutral bonds,and all the funds raised were invested in the construction of wind farm projects,which relieved the shortage of electricity in the region to a certain extent,and also indirectly contributed to the improvement of the international competitiveness of China’s power industry.Finally,based on the research conclusions of this thesis,relevant suggestions are put forward based on the perspectives of the government,enterprises and investors.We hope to provide reference for other companies to conduct carbon neutral bond financing,and also provide investors with relevant information and carbon neutral bond investment advice,so that they can make better investment decisions and promote the steady operation of the carbon neutral bond market by the regulatory authorities.some views on specific measures.