Industrial Bank, Hong Kong Branch (IBHK) has secured US$50 million through a green repurchase agreement, or green repo, with Crédit Agricole CIB. It is the first such deal for the Chinese bank.

The cash leg of the green repo will be used exclusively to finance the Chinese bank’s eligible green loans in line with its green bond framework. A green repo is a complementary green refinancing tool to a green bond, allowing an issuer to immediately refinance green assets/projects and finance them in the short or medium term in between two green bond issuances.

According to Crédit Agricole CIB, the transaction has been structured based on the best practices of sustainable finance markets, including the promotion of transparency in the allocation of proceeds to eligible green loans and the accountability of the seller by disclosing a dedicated allocation and impact reporting.

The new financing structure aims to drive more capital into green projects and support global efforts towards a low-carbon energy transition.

Crédit Agricole CIB acted as green structuring adviser on the transaction.

Commenting on the deal, Antoine Rose, head of sustainable banking for Asia-Pacific and the Middle East at Crédit Agricole CIB, notes: “As an entrusted partner to Industrial Bank, Crédit Agricole CIB has been helping them structure and develop sustainable finance products since the inception of the market, and has been supporting all their green bond issuances as green structuring adviser so far. We see promising opportunities in the green repo market in Asia-Pacific with an aim to offer a new funding solution dedicated to sustainability financing for financial institutions.”