Markets

Belt and Road green bonds listed in Dubai by Chinese bank

October 16, 2023, 3:10 PM

Zhang Xiaodong, executive VP at Bank of China, rings the opening bell at Nasdaq Dubai to mark the green bonds' release — Zhang Xiaodong, executive VP at Bank of China, rings the opening bell to mark the bond release

Bank of China issues $770m of bonds
Nasdaq Dubai now has $120bn of debt listed
Belt and Road Initiative launched 10 years ago

Bank of China has issued the first green bonds focused on Belt and Road Initiative projects in the Middle East, listing them on Nasdaq Dubai.

The $770 million listing by one of China’s largest state-owned banks raises the total value of debt listed on Nasdaq Dubai to nearly $120 billion.

The green notes have simultaneously been issued by the Dubai ($500 million) and Luxembourg ($270 million) branches of Bank of China, to coincide with the 10th anniversary of the start of the Belt and Road project.

The proceeds generated will be allocated to eligible green projects in countries including the UAE and Saudi Arabia. Bank of China has issued five Belt and Road-themed notes since 2015, with a total size of nearly $15 billion.

Since 2016, it has also issued $18 billion of green (environmental, social and governance investing-linked) notes through its 12 overseas branches.

A decade into the project to place China at the centre of a global trade network, research suggests that Beijing remains committed to the Belt and Road despite its faltering economic growth.

A report published in August by the Green Finance & Development Center at Fudan University in Shanghai showed that China’s total investment has now passed the $1 trillion mark, up from $962 billion at the end of 2022. About $596 billion of the total is in construction contracts and $418 billion is non-financial investments.

The Fudan report said that of the 45 countries receiving Chinese financing and investment in the first six months of 2023, Saudi Arabia had the highest construction volume at $3.8 billion. It was followed by Tanzania with $2.8 billion and the UAE at $1.2 billion

The Belt and Road Initiative, launched by President Xi Jinping in 2013, aimed to invest in more than 150 countries across Asia, Africa and Latin America.

In the Middle East, China established full strategic partnerships with Algeria, Egypt, Saudi Arabia, the UAE and Iran.

Beijing’s engagement has since expanded to include heavy investment in other countries such as Iraq, as well as diplomatic mediation between partners such as Iran and Saudi Arabia.