China’s green panda bonds are ‘reliable’ financing option for Africa, summit hears

Digital financial inclusion event in Nairobi brings together more than 100 fintech companies from African and Asian countries

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China is encouraging greater adoption of the yuan as a trading currency in Africa. Photo: Shutterstock

Published: 5:00pm, 23 Aug 2024Updated: 5:10pm, 23 Aug 2024

African countries can easily raise financing by issuing “stable and reliable” green panda bonds, an executive of China’s central bank has told a summit in Nairobi, as Beijing steps up its internationalisation of the Chinese currency.

“We welcome Africa to launch green bonds in China to raise stable and RMB-based financing from the Chinese market,” said Ji Min, director general of the People’s Bank of China counsellor’s office.

Speaking at the 2024 China-Africa Digital Financial Inclusion Summit on Wednesday, Jin described the bonds as a “reliable and predictable source of funds” and noted that Egypt last year became the first African nation to issue green panda bonds.

Facing an economic crisis and consequently fewer US dollars and other hard currencies, Egypt floated a three-year sustainability panda bond worth 3.5 billion yuan (US$478 million) in October.

Panda bonds – typically denominated in yuan and issued in China by non-Chinese organisations, including governments and corporations – have gained traction as traders and countries seek to diversify from an over-reliance on the US dollar.

More than 150 billion yuan worth of panda bonds were issued in China last year, with the number of issuers increasing by more than 80 per cent year on year, according to Chinese data.