A Case Study Of Longyuan Power Green Bond Issuance

As the citizens,governments,and investors aware of the harmfulness of climate change,the clean energy industry is gaining momentum.As a kind of renewable energy,the development and use of wind power have important meaning to relieve the pressure of the energy shortages and climate change.However,the construction of wind energy plant has a long cycle and high investment costs,and it is difficult to obtain long-term support from low-cost funds.Moreover,the large scale of short-term debts can easily aggravate the maturity mismatch problem of corporate funds;on the other hand,wind power companies are building wind power projects The gradual increase in scale has also increased the funding gap for wind power companies.The stable development of wind power companies requires long-term,low-cost and large-scale financial support.As a debt-type financial product,green bonds have the characteristics of low financing costs and flexible maturities,which provide a solution for wind power companies’ financing.This paper takes Longyuan Power Corporation as the research object to conduct a case study of green bond issuance.As the earliest professional company to develop wind power in China,Longyuan Power has long been engaged in the research and development of wind energy and other clean energy technologies,and it is a representative research object.This article first introduces the industry background and corporate background of Longyuan Power’s green bond issuance,gives an overall introduction to the basic terms and the capital use of green bonds,and introduces the reasons for the issuance of green bonds from the perspective of external macro and internal development of enterprises.Secondly,from the perspective of corporate financing and the financial support of green bonds to wind power companies,the financial,economic and environmental benefits of green bond issuance are analyzed.Subsequently,from the perspective of bond risk,it analyzes the market risk,liquidity risk,credit risk,and environmental risk faced by Longyuan Power’s green bonds.Specifically,in the credit risk analysis,this article uses the KMV model to analyze the credit risk of Longyuan Power’s green bonds.At the same time,it also summarizes the problems in the green bond issuance of the case enterprise.Finally,the conclusions of this article are drawn:(1)The issuance of Longyuan Power’s green bonds has positive financial,economic and environmental benefits,it can reduce corporate financing costs,and relatively alleviate the problem of project maturity mismatches.The construction of green bond fundraising projects plays an important role in alleviating the employment problem of local population,reducing the burden of power supply on the local power grid,increasing local government tax revenue,and energy saving and emission reduction.(2)Longyuan Power’s green bonds face relatively low overall risks,and relatively low credit risks and environmental risks.However,due to macro fundamental adjustments and changes in risk-free yields,the green bond bonds issued in 2018 and 2020 have relatively high interest rate risks;Longyuan Power’s green bond exchange rate is low,and trading activity is not high.There is a certain liquidity risk.(3)the green bond policy of China is imperfect,and the development of the green bond market is not yet mature,resulting in the issue of information disclosure and green certification in the issuance of Longyuan Power’s green bonds.Based on these conclusions,this article puts forward relevant recommendations.Bond issuers should increase the transparency of green bond information,further stimulate the advantages of green bond issuance,and strengthen risk management of green bonds;government regulatory agencies should formulate and implement relevant supporting policies and improve the green bond certification mechanism,To guide investors to establish green investment concepts.