Commentary: The Internationalization of Yuan Can Help Close the Climate Finance Gap
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The renewed withdrawal of the U.S. from the Paris Agreement has set off a chain reaction, with other major global donors and multilateral institutions scaling back their commitments and reducing climate-related investments. This has placed further pressure on global climate funds, making the financing gap for climate adaptation and mitigation in developing countries more pronounced and the task of filling it all the more urgent.
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- The U.S. withdrawal from the Paris Agreement has widened the climate finance gap, while China’s yuan-denominated bond markets (Panda, Dim Sum, FTZ) are rapidly increasing global climate funding, especially for developing countries.
- As of Q3 2025, issuers raised nearly 120 billion yuan in Panda and 667 billion yuan in Dim Sum bonds, with FTZ bond issuance approaching 130 billion yuan.
- Yuan bond markets offer lower financing costs, attract South-South investments, support sustainable projects, and promote green technology transfer.
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[para. 13][para. 14] (Author bios and disclaimer.)
- Wind
- Wind is a Chinese financial data provider. The article states that according to data from Wind, offshore entities issued nearly 120 billion yuan ($17 billion) in Panda bonds and 667 billion yuan in Dim Sum bonds in the first three quarters of 2025.
- OTP Bank
- OTP Bank is a Hungarian institution that became the first from its country to issue offshore yuan bonds. In 2025, they raised 900 million yuan through a green Dim Sum bond. This bond issuance helped finance sustainable development projects.
- Suzano
- Suzano, a Brazilian pulp company, issued a 1.2 billion yuan green Panda bond in 2024 with the Bank of China's support. This three-year bond, issued at a 2.8% rate, funds certified eucalyptus plantation projects for carbon sequestration and forest protection, significantly reducing capital costs compared to typical dollar-denominated financing.
- Bank of China
- Bank of China supported Brazilian pulp giant Suzano in issuing a 1.2 billion yuan green Panda bond in 2024. This three-year bond was issued at a rate of just 2.8%, significantly reducing Suzano's cost of capital after currency hedging compared to conventional dollar-denominated financing. The proceeds are designated for certified eucalyptus plantation projects, which contribute to carbon sequestration and forest protection.
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