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Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy

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  • Jingyan Fu

    (Institute of Resource, Environment and Sustainable Development, College of Economics, Jinan University, Guangzhou 510632, China)

  • Artie W. Ng

    (Research Centre for Green Energy, Transport and Building, School of Professional Execution & Executive Development, The Hong Kong Polytechnic University, Hong Kong, China)

Abstract

Green bonds have increasingly been utilized around the world as a source of financing for renewable energy development, designed with compliance requirements and measurable economic returns to investors, while mitigating climate change. However, the efficacy of green bond arranged in the emerging economies for financing renewable energy assets and how the underlying risks are managed have remained to be explored. The paper aims to examine the evolving green financial system sponsored by both public and private institutions in managing such risks within China’s emerging economy. A case study of green financing for a bundle of wind power assets led by a state-owned enterprise (SOE) reveals an alternative approach by structuring public–private collaboration while stipulating market-based financial incentives to institutional stakeholders under a political economy. This institutional consortium is composed of a state development bank, a commercial bank, credit rating agencies, institutional and private investors, regional power purchasers, and carbon trading entities. Financial stakeholders’ risk in such emerging sustainable investment is moderated by these participating institutions and structured “upsides” from carbon trading aligned with the framework of green finance and standards for green bond development. The results reveal the potentials of scaling up the development of renewable energy by adequately managing and sharing key risks, while allocating substantial funding into renewable energy projects under such a green financial system that is to be complementary with a scalable post COVID-19 economic recovery.

Suggested Citation

  • Jingyan Fu & Artie W. Ng, 2021. "Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy," Energies, MDPI, vol. 14(11), pages 1-16, May.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3076-:d:562015
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    2. Asuamah Yeboah, Samuel, 2024. "Catalysts for Change: Government Incentives Driving Sustainable Construction in Developing Countries," MPRA Paper 122480, University Library of Munich, Germany, revised 29 Sep 2024.
    3. Liu, Yu & Li, Yiming & Jiang, Fan & Yin, Shi, 2024. "Diversifying natural resources for green recovery in China: Strategies and solutions," Resources Policy, Elsevier, vol. 88(C).
    4. Chang, Lei & Moldir, Mukan & Zhang, Yuan & Nazar, Raima, 2023. "Asymmetric impact of green bonds on energy efficiency: Fresh evidence from quantile estimation," Utilities Policy, Elsevier, vol. 80(C).
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    6. Pan, Weihua & Cao, Hang & Liu, Ying, 2023. "“Green” innovation, privacy regulation and environmental policy," Renewable Energy, Elsevier, vol. 203(C), pages 245-254.
    7. Martí-Ballester, Carmen-Pilar, 2022. "Do renewable energy mutual funds advance towards clean energy-related sustainable development goals?," Renewable Energy, Elsevier, vol. 195(C), pages 1155-1164.
    8. Luo, Rui & Chen, Ping & Wang, Yachao, 2024. "Green investment products, consumer behavior, and regional carbon emissions levels," Finance Research Letters, Elsevier, vol. 66(C).
    9. Indre Siksnelyte-Butkiene, 2021. "Impact of the COVID-19 Pandemic to the Sustainability of the Energy Sector," Sustainability, MDPI, vol. 13(23), pages 1-19, November.
    10. Nihal Ahmed & Franklin Ore Areche & Adnan Ahmed Sheikh & Amine Lahiani, 2022. "Green Finance and Green Energy Nexus in ASEAN Countries: A Bootstrap Panel Causality Test," Energies, MDPI, vol. 15(14), pages 1-13, July.
    11. Lee, Chien-Chiang & Wang, Fuhao & Chang, Yu-Fang, 2023. "Does green finance promote renewable energy? Evidence from China," Resources Policy, Elsevier, vol. 82(C).
    12. Lee, Chien-Chiang & Wang, Fuhao & Chang, Yu-Fang, 2023. "Towards net-zero emissions: Can green bond policy promote green innovation and green space?," Energy Economics, Elsevier, vol. 121(C).
    13. Sampene, Agyemang Kwasi & Li, Cai & Wiredu, John, 2024. "An outlook at the switch to renewable energy in emerging economies: The beneficial effect of technological innovation and green finance," Energy Policy, Elsevier, vol. 187(C).
    14. Qi, Ruijuan & Liu, Chang & Zhang, Qiwen, 2024. "Evidence mechanism for promoting natural resources and green recovery through green economy: Sustainable assistance in finance," Resources Policy, Elsevier, vol. 91(C).
    15. Sun, Yi & Gao, Junjun, 2023. "Natural resource endowment and its lmpact on ecological efficiency," Resources Policy, Elsevier, vol. 87(PB).
    16. Rao, Amar & Kumar, Satish & Karim, Sitara, 2024. "Accelerating renewables: Unveiling the role of green energy markets," Applied Energy, Elsevier, vol. 366(C).
    17. Wenbing Luo & Ziyan Tian & Shihu Zhong & Qinke Lyu & Mingjun Deng, 2022. "Global Evolution of Research on Sustainable Finance from 2000 to 2021: A Bibliometric Analysis on WoS Database," Sustainability, MDPI, vol. 14(15), pages 1-23, August.
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    19. Peng, Hong & Chen, Hailin & Sun, Yong & Zhang, Xiaofeng & Abubakar, M., 2024. "Environmental economics of green recovery in mineral extraction: Balancing production and conservation," Resources Policy, Elsevier, vol. 96(C).

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