| The concept of Green Finance was risen increasingly in recent years, also known as the Environmental Finance or the sustainable Finance.It's connotation contains the study of how to use the variety of financial instruments to protect the environment and reduce damage to the environment, maintaining biological diversity. Green finance was born to against the situation of Global warming, ecological destruction, energy crisis and the survival crisis to human。It is very important to the Sustainable Development of human and ecology。Green Finance was introduced from abroad in the last century nineties, now more and more countries and international organizations have pay attention to it, making widely practice, having made great progress to solve the problems of environment, pollution control, development of new clean energy。For example, the Equator principle which was brought in 2003 is a concrete manifestation of Green Finance in banker area。China is a Large developing country with large population, low per capita resource, low resource utilization, in the process of rapid economic development, environmental issues become increasingly prominent,Even in some areas, people's normal living and development was greatly threatening because of the orderless use。For example, the City of Linfen in Shanxi Province, which was rich in coal, has been identified clearly as not suitable for human habitation areas by the international environmental agencies for several years.In this tough situation, we have to put the protection of environment on the agenda, which is also a important part of the building of Scientific concept of development and building a Scientific Outlook on Development and harmonious society。In 2007,Ministry of environmental protection of China unites the People's bank of China and the China Banking Regulatory Commission to control the cerdit funds, Strengthen energy-saving emission reduction,this is the first time we begin to introduce the Green Finance。In September the same year, the Seminar of "financial industry to achieve emission reduction targets for energy conservation" made it more clear that we must build the Green Finance System step by step。The year of 2008 is a important year in which China has advocated the Green Finance widely, with the introduction of "Green Loan" "Green insurance"and"Green securities", The first China's Green Finance forum was held in April,2009.it implys that our country are now providing variety of Financing methods for the environment in finance sector, expanding financing channel, helping the development of environment protection。The environment protection itself is a Sunrise industry all over the world, it developed very quickly with the support of government, expanding its market。China's environment financing raised very quickly in recent years, the total amount of investment made a new record continuous, the total amount of environment investment of China is 200 billion Yuan during "the eighth five-years Project" period,360 billion Yuan in "the ninth five-years Project" period,700 billion Yuan in "the tenth five-years Project" period, and probably 1500 billion Yuan in "the eleventh five-years Project" period, twice of the amount of the previous five years, recent tens years our environment products rise at a 23% rates, Gross products Values rise from 17.3 billion in 1997 to 47.2 billion in 2001,Much higher than the average annual GNP growth rate。As we say that the investment to environment is a potential industry In line with national industry Revitalization plans。The environmental protection industry in China is still an emerging industry, which is less competitive and short of scale advantage. There are numerous companies in China engaging in environmental protection products selling and services, in which more than ten thousand enterprises are specialized or sidelined in environmental protection industry. Though growing rapidly in recent years, the company scale is very small, about ninety percent in this industry are companies whose asset sizes are below one million yuan SMEs. Because they lack high-end products and capability of independent innovation, they always face business risk, rely on policy supports and are poor in resist on risk, they are susceptible to be impact by big foreign companies. Compared to private-owned enterprises, banks are more likely financing to large and medium-sized state-owned enterprises due to the security principle of loan management, the shortage in money supply in this industry has influenced the development of many private-owned enterprises, thus it is essential to introduce new way of financing.I advise that we should build a investment-financing system contains "green invest" besides"green credit","green insurance"and "green security", the "green invest" would become the most important part to be pay more attention to develop like green credit. The main part of green invest is venture capital, which contains risk investor, venture capital firm, angel investors, venture organizations affiliate of some big companies. They can buy the equity directly or offer loan guarantee for the companies. There are four form of investment:the first is the traditional one mainly used in seed financing by withdrawing IPO, the second is venture lease, the third is Mezzanine Finance which is between equity financing and debt financing, the fourth is venture-based leverage buyout and venture-backed mergers and acquisitions, which always help firms complete mergers and acquisitions (M&A) through financial leverage. Among the four forms, the traditional one and M&A are common and have emerged in huge scale of buy-out funds. The investment stage of venture capital to the target firm in China is divided into seed financing, pioneering period, growth period, expansion period and mature period, while in western countries, it is divided into four period:seed financing, pioneering period,, expansion period and mature period. According to statistics data manifestation, the major investment phases of foreign venture capital firm's investment in China to invest are seed financing and start-up stage, while the domestic ones are inclined to invest on the expansion stage in the hope of get returns in a short term then exit.. In the end, a venture capital completed an investment through exiting, A well-behaved exiting mechanism will maximize the return.. The main methods of exiting are IPO, M&A, equity transfer, MBI, liquidation and the perfect exit method is IPO because its high return, usually it can gain ten or more capital appreciation relative to the original investment, the liquidation is the last method they'd like to see.Since "The First Proposal" proposed by the Democratic National Construction Association Central in 1998, venture capital has been growing rapidly in China. It has been experienced its entrepreneurship services center, VC firms, large scale venture capital, and now it has became the situation of co-development with domestic foreign joint venture capital, it manages a rapidly expanding scale of capital. Software, IT, biological, information industry and etc are the main area of venture capital in the early period and in recent years the cleaning industry has been received more attention, some venture capital companies in China concentrate on the environmental protection industry and received some benefits. The input mechanism is basically the continuation of the planned economy system in China, the major channel of environmental protection funds are from the government budget and extra-budget, but there are huge gap because of the lack of financial fund, in the meantime, financial fund are always preferred to be provided to the state-owned company, which doesn't actually lack liquidity. In the indirect financing market banks always pay more attention to the heavy buyer and state-owned company and ignore SMEs. Most environmental protection company can't meet the three requirements of bank loans, the companies which are in the seed or start-up period have no steady cash flow, have no guarantee of profit potential and great business risk are difficult to obtain bank loans, the big and medium sized state-owned companies are more easier to get the loan while the truly needed SMEs can't find support from the banks. Even after the green credit policy, the SMEs can't get benefit from it because of its small scale. We have opened the GEM, but both of the boards or the second board market, the listing requirements for the vast majority of the environmental protection firms are still hard to satisfy. In this situation, the VC which focus on high risk investment becomes the perfect financing method for the environmental protection firms. The private-owned companies are preferable to VC, which helps to promote the industrialization of scientific and technological achievements, and to utilize various resources to make the invested company bigger and stronger, to promote enterprises to go public.From the external environment, the policy, law, tax environment and etc on VC engaging on environmental protection have been improved. The practice of Partnership Law has greatly stimulated the VC's passion on it. The reduction and exemption on tax disperse the investment risk and the exit mechanism progressed day by day. We suggest our government put vigorous expansion of VC and takes America, Israel for example, setting up the environmental protection industry fund and introduce fund of venture investment, developing enterprise incubator, attracting private capital, making the exit of VC smoothly, and above all we propose that the VC has been faced innovation requirements, it has to be attached to the actual situation to promote the investment efficiency.At last I make a outlook and advise that The government's great support is of the first importance, we can help the VC disperse risk and attract VC by means of government's financial subsidy or guarantee and the right industry introduction. Secondly, taking advantage of the capital market, especially, the equity market and property right market. |
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