New Blue Loan to Help Bank of Qingdao Pilot Blue Finance, Supporting China’s Climate Goals

The landmark $150 million financing package includes $40 million from IFC’s own account and $110 million parallel loans from the Asian Development Bank (ADB), DEG - Deutsche Investitions-und Entwicklungsgesellschaft and the French development finance institution Proparco.

China’s rapid economic growth ran parallel with degradation of its natural resources and increases in water and air pollution. More than 50 percent of China’s coastal wetlands have been lost to development. Pollution carried by rivers to China’s coasts causes food safety and health concerns. Each year, 1.3 to 3.5 million tons of marine litter, or marine plastics, were added into China’s oceans, making the country one of the largest contributors to marine litter. As the government is increasing its focus on protecting marine ecosystems and developing the marine economy, blue loans or blue bonds can help mobilize funding for those ocean-friendly solutions. 

Dual-listed on the Hong Kong Stock Exchange and the Shenzhen Stock Exchange, BQD is headquartered in Qingdao City - a marine economy powerhouse with its 30 percent gross domestic product (GDP) in marine sectors. In the past two years, IFC has supported BQD to develop business strategies and systems to optimize opportunities while managing risks associated with blue finance activities. Among others, IFC and BQD joined forces to create the bank’s first blue finance framework and taxonomy which identifies 37 activities across seven categories.

“Our oceans are valuable assets. We are proud to be the first Chinese bank to partner with IFC to pilot blue finance and expand marine economy in China,” said WANG Lin, President, Bank of Qingdao. “IFC’s investment and advisory service will enable us to focus on critical areas such as sustainable fishery, waste and water treatment and plastic management projects, accelerating economic recovery amid the ongoing pandemic.”

IFC's Regional Vice President for Asia Pacific Alfonso Garcia Mora said, "IFC has been at the forefront of creating green and blue financing markets in China and globally. With this investment, IFC expects to demonstrate a strong business case for blue finance and inspire more innovative programs addressing China’s climate challenges.”

Since 2020, IFC has provided more than $400 million dollars in blue investments to private firms, for example to boost recycling and reduce marine plastic pollution, among others, in Africa and Asia. IFC has also invested in blue bonds issued by banks in the Philippines and Thailand. 

“Blue finance holds great potential to support the key role oceans and clean water play for the environment, biodiversity and humankind. Proparco is thus proud to join forces with IFC, ADB and DEG and contribute to the development of new tools dedicated to bridging the funding gap for healthy oceans and waterways.” said Raphaël de Guerre, Proparco’s Regional Head for North and Southeast Asia.

“ADB supports financing for ocean environment and sustainable blue economies projects with a target of providing $5 billion of investments and technical assistance during 2019–2024,” said Christopher Thieme, Deputy Director General of ADB’s Private Sector Operations Department. “With the $35 million private sector loan and associated technical assistance, ADB will support Bank of Qingdao to scale up its blue finance operations and contribute to sustainable marine development and pollution control in the PRC.”