Electricity generated from an offshore wind farm in Dongying, East China's Shandong Province is connected to the grid on October 29, 2022. It is the first wind farm project in China that sells electricity without a subsidy. The wind farm generates 1.69 billion kilowatt hours of electricity a year. Photo: cnsphoto

Chinese energy companies are accelerating issues of special-purpose bonds, in a move that experts say will help companies amid a volatile global energy market and ensure sufficient domestic energy supply during the upcoming winter season.  

In total, several major Chinese energy companies have issued more than 100 billion yuan ($13.66 billion) of such bonds so far, according to data from the National Association of Financial Market Institutional Investors (NAFMII).

Companies including China Reform Holdings Corp, China Datang Corp, State Power Investment Corp, China Huaneng Group and Datang International Power Generation have issued 10 batches of special-purpose energy bonds with a total amount of 102 billion yuan, the NAFMII said.

This comes after an executive meeting of the State Council, China's cabinet, in August pledged support for the issuance of 200 billion yuan in bonds to help centrally administered power producers boost energy and power supplies. 

The special-purpose bonds will go precisely and directly to central power generation enterprises, a move that can ease their investment and financing pressure, reduce their leverage, and ensure national energy security and electricity supply, the NAFMII said.

The bonds will improve the financial soundness and sustainability of the development of enterprises and give full play to the role of the market in allocating resources, resulting in win-win results in investment and financing, it said.

Proceeds from the bond issues can play a positive role to ensure energy supply during the winter heating season and ease the operational pressure of power enterprises that are in a tight financial position amid volatile international energy prices, Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Thursday.

In a separate move to ensure winter heating, Chinese coal producers are stepping up efforts to expand output.

Data released by the National Bureau of Statistics showed that in the first three quarters, the output of industrial raw coal by companies above designated size reached 3.32 billion tons, up 11.2 percent year-on-year.

Global Times