Bond defaults have reached record highs. Photo: iStock

China Bond, a platform that runs under the state-owned China Central Depository and Clearing, announced on August 31 that nine local government bonds will be included in its so-called Green Indices Index, Yicai.com reported on Thursday.

The nine local governments issuing bonds include Chongqing, Ningxia, Hubei, Yunnan and Xiamen, China Bond said at a press conference, making them the first local government bonds to be included in the Green Indices Index.

In order to get within the index, the bonds have to meet the “green” guidelines of two state-owned organizations and two international agencies, which include China’s National Development and Reform Commission as well as the People’s Bank of China guidelines, and the International Capital Markets Association and Climate Bonds Initiative, the report said.

A spokesperson from China Bond said that local governments are starting to take notice of green bonds after the State Council gave the go-ahead to provinces to set up green financing “experimental zones” in June of last year.

Compared to normal bonds issuance companies, where local governments act as the issuers, local governments are able to provide more stability for green infrastructure projects as well as issue larger sums of bonds capital, the spokesperson told Yicai.

As of the end of August, there are a total of 714 bonds in the Green Bonds Indices Index, totalling 2.43 trillion (US$370 billion) in value, the report said.