1 Trillion Yuan Low-Cost Loans From the People’s Bank of China for Carbon Reduction

PVTIME – On November 8, the People’s Bank of China (hereinafter referred to as PBOC), the Central bank, will provide 60% of loan principals to financial institutions for energy saving and environmental protection, with a one-year lending rate at 1.75%.

The PBOC stated that, in cooperation with relevant departments, in accordance with the principle of intersecting various domestic standards and in line with international standards, it will focus on supporting the three carbon emission reduction areas of clean energy, energy conservation and environmental protection, and carbon emission reduction technologies. 

The clean energy field mainly includes wind power generation, solar energy utilization, biomass energy utilization, and relevant industries. The technical fields of carbon emission reduction mainly include carbon capture, storage and utilization.

Financial support is expected to cut down carbon emission in those industries significantly, including the improvement of energy efficiency in the industrial field, the transformation of new power systems, etc.

According to the PBOC, it is equivalent to a targeted interest rate cut and re-loan to support the green economy and new energy. As of Q3 of 2021, the cumulative balance of green loans is 14.78 trillion yuan. The central bank’s carbon reduction support tool may release a trillion-level currency.