Analysis On The Causes And Effects Of Huaneng Power International,INC’s Issuance Of "21 Huaneng GN002" Carbon Neutral Bond

In recent years,with the continuous development of national economy,our country is facing direct conflict between environment and economic development,but General Secretary Xi Jinping pointed out that economic development and environmental protection are not in opposition.Only by insisting on sustainable development can our country practice the concept of man and nature living in harmony.At the UN General Assembly in September 2020,the Chinese government put forward China’s environmental commitment of "carbon peaking and carbon neutrality",which shocked the world.In this context,carbon neutral bond,a new subset of green bonds,comes into being.Carbon neutral bond is a debt financing instrument that uses raised funds specifically for green projects with carbon emission reduction benefits.Since the issuance of the first batch of carbon neutral bonds in February 2021,China’s carbon neutral bond market has developed rapidly and become more and more mature.Public utilities,such as the electric power industry,account for the majority of issuers.Huaneng International,as one of the first entrants to the carbon neutral bond market,is also a leading enterprise in the electric power industry,so it is of certain significance to study its carbon neutral bonds.Among the two phases of carbon neutral bonds issued in 2021,the second phase of green medium-term notes in 2021 is more mature than the first phase,which is reflected in raising more funds,lower cost and better carbon emission reduction benefits.Therefore,"21 Huaneng GN002" is chosen as the research object in this paper.The case study found that,first,the background and motivation of the issuance of carbon neutral bonds by Huaneng International can be analyzed based on the concept of sustainable development and the theory of prioritized financing,etc.,and it is concluded that the issuance of carbon neutral bonds by power enterprises can meet the long-term capital needs of the construction of power generation projects and promote the green transformation and upgrading of enterprises.Second,due to the increase of power generation costs and the high leverage ratio of construction projects,the issuance of "21 Huaneng GN002" may have risks,but through the overall analysis of the power industry,it is believed that the risk of enterprise default is low in the duration.Third,Huaneng International has realized the organic combination of financing benefits,social and reputation benefits and environmental benefits by issuing carbon neutral bonds in this period.The enterprise has obtained a large amount of capital at a low cost,improved its social impact and reputation,and promoted the implementation of carbon emission reduction projects.Based on the carbon emission reduction benefits and the development of carbon trading market,this paper improved "21 Huaneng GN002".Let the financial attribute and carbon emission reduction organic combination.Based on the above,this paper summarizes the advantages and disadvantages of this issue,and provides suggestions to issuers,investors and policy makers on the possible risks and problems arising from issuing carbon neutral bonds,so as to provide theoretical support and reference methods for the better development of China’s carbon neutral bond market and the realization of the "double carbon" goal as soon as possible.