Research On Investment And Financing Risk Management Of Green Bonds In Power Industry

With the intensification of environmental pollution problems around the world,various countries are facing the problem of economic transformation.In green industries,investment projects are usually in a large size and have long investment cycles,so a great amount of high-quality financing is required and a variety of green financial products have emerged in the market.As one of important innovative products of green finance,green bond has grown rapidly.At present,China has became the second largest green bond market in the world,and the power industry is also one of the main forces in issuing green bond.On the one hand,Green bond provides a new financing channel which has low-cost,long-term and a large scale of funds,it provides new solutions for power industry to solve financing problem.On the other hand,it provides market investors with more choices of investment.However,green bond has unique characteristics,and there are various risks in its issuance process.These potential risks may do harm to the interests of investors and may affect the stability of the bond market.Therefore,analyzing the investment and financing risks management activities of green bonds is very important for promoting the transformation of green industries and maintaining the order of the green bond market.Taking Goldwind Technology Co.,Ltd.,a leading enterprise in the wind power industry as an example,this paper studies a green asset-backed security and a green perpetual bond issued by it in 2016.The internal and external risk management of Goldwind’s green bonds was discussed.First,this paper briefly introduces the basic situation of the power industry and the company,and it describes the specific terms of the two green bonds in detail,including basic information,certification,investor protection measures and other terms.Secondly,this paper introduces various risks in the issuance of Goldwind’s green bonds,including policy risk,project operation risk,assessment and certification risk,etc.,then it analyzes the special problems existing in the issuance of Goldwind’s green bonds and the problems of risk management activities.In usual,investors have more serious problems in green bond investment risk management because of limited measures,so the government and regulatory authorities are required to protect investors.Therefore,this article finally focuses on issuers,investors and government regulatory organizations and give recommendations for them separately.Combined with case analysis,this paper draws four conclusions on the investment and financing risk management activities of green bond: First of all,there is much room for improvement in the activity of the green bond market.Secondly,issuers’ enthusiasm for active risk management needs to be improved.Thirdly,systematic legal and institutional constraints for the supervision of the green bond market are required.Lastly,the specific advices for risk management still need further practice.The green bonds issued by Goldwind are representative,for this reason the research in this paper can provide reference for power companies and other green bond participants in the market to improve their risk management capabilities.For external regulators,this paper may also help them to enhance their awareness of investment protection and improve their supervision practice.In the end,it can further promote the health development of the green bond market.