Polluting companies use transition bonds to move to a greener future

Wealthandsociety24 Sep, 2021Finance

Transition bonds are a new asset class targeted by these brown industries such as oil and gas companies to allow these not-so-green companies to finance their efforts to reduce carbon emissions. The proceeds from transition bonds are used for projects that support gradual reduction of carbon emissions. The deals that have been concluded so far include Castle Peak Power?s $300 million sale in February 2021. The company has committed to transfer proceeds towards construction of a gas turbine power station unit in Hong Kong. Bank of China?s Hong Kong branch issued a transition bond worth $780 million for projects that can support China?s Paris Agreement target of attaining carbon neutrality by 2060.