Three Gorges Energy Green Asset-Backed Note Financing Case Study

In September,2020,China put forward the new goal of "peak carbon dioxide emissions,carbon neutrality",supported the green transformation of economy,and built a green financial system,which became the main theme of economic development.The electric power industry is characterized by intensive technology,large investment amount and long payback period,etc.To develop the renewable energy power generation industry,a huge amount of money needs to be invested.The renewable energy industry strongly dependons the preferential policies of the government,but the government can’t guarantee the timely payment of renewable energy subsidies,which makes the financing gap of renewable energy enterprises widen,and the green asset-backed notes can solve the problem of subsidy arrears in the renewable energy power generation industry.Based on the theoretical research of green finance by existing scholars,this thesis takes China Three Gorges New Energy（Group）Co.,Ltd.（hereinafter referred to as Three Gorges Energy）as a case study,analyzes the functions of green asset-backed bills in reducing financing costs,expanding financing channels,improving environmental benefits and optimizing financial structure in practical application,and explores the problems existing in product structure design,so as to provide reference cases for enterprises to use green ABN financing in the future.Firstly,analyze the motivation of green ABN issued by Three Gorges Energy;Secondly,by analyzing the future cash flow of Three Gorges Energy Green ABN,it is found that the basic assets of Three Gorges Energy Green ABN are scattered and the cash flow is stable;Thirdly,by analyzing the risks and countermeasures of the Three Gorges Energy Green ABN,it is found that the Three Gorges Energy Green ABN has better protection against liquidity,account management and credit risks,but the liquidity balance payment mechanism can’t form an effective credit enhancement mechanism,and it can provide a higher level of guarantee commitment in the future,with priority/secondary hierarchical design to meet the investment needs of different consumers.Fourthly,by comparing the financing cost of Three Gorges Energy Green ABN with other financing costs of enterprises and the cost of similar AAA-level asset-backed bills issued in the market at the same time,it is found that Three Gorges Energy Green ABN has a significant cost reduction effect,and can improve the asset-liability structure,increase liquidity and generate considerable environmental protection benefits.Fifthly,on the basis of the above analysis,some suggestions are put forward for the issuer and government departments respectively.The issuer should improve product credibility,disperse basic assets and design products in layers,and the government should strengthen policy support,information disclosure and green certification system.In the future,China still needs to constantly improve the credit enhancement mechanism of green ABN and expand the scope of investors to help China achieve the "double carbon" goal and promote the progress of green financial market.