Recently, the Postal Savings Bank of China (hereinafter referred to as PSBC) Guangxi Branch successfully issued an ESG sustainability-linked loan to a paper company invested by an ASEAN country in Guangxi. The loan integrates advanced ESG financial instruments and philosophy at home and abroad into product design, providing the enterprise with financing plus intelligence service and facilitating its high-quality development.

Located in the Qinzhou Port area of China (Guangxi) Pilot Free Trade Zone, the paper company is an important enterprise invested by a paper group from an ASEAN country producing pulp and paper in Guangxi. With constant expansion of its production and operation, the enterprise is facing transformation and upgrading in its development, thereby requiring more financial support. Knowing that PSBC Guangxi Branch had completed the country’s first “carbon-reduction supporting tools plus sustainability-linked loans plus digital yuan” business, and had rich experience in the application of transformational products, the paper company intended to strengthen cooperation with PSBC in such business. After learning about the information, PSBC Guangxi Branch immediately tailored a financing scheme for the enterprise, and set four ESG sustainability performance indicators, including COD emissions per unit of product, water discharge per tonne of pulp product, the number of employees newly recruited from the key counties receiving assistance for rural revitalization in the year, and safety training programs organized in the year. It linked the indicators to the interest rates of the loans, so as to stimulate the sustainable development of the enterprise.

To enable efficient financial service, PSBC Guangxi Branch (as the lead and agent bank) joined hands with PSBC Shanghai Branch (as the participating bank), since PSBC Shanghai Branch manages the bank account of the enterprise’s parent company, to grant the loan and provide financing support for the enterprise. And they increased the line of credit to 1.1 billion yuan (about 152.06 million US dollars) according to the business development and capital needs of the enterprise. They have granted the first loan of 500 million yuan (about 69.12 million US dollars) to the enterprise for purchasing raw materials, of which 160 million yuan (about 22.12 million US dollars) has been paid to overseas countries through PSBC’s cross-border renminbi business, thus providing a one-stop solution to the financial needs of the enterprise.