Green and Sustainable Finance

In 2022, Towngas Smart Energy successfully issued a RMB 500 million 7-year green loan. In the first half of 2024, the Group further issued a RMB 500 million green loan. The respective loans will be used entirely for renewable energy businesses, such as the development of solar photovoltaic systems.

In 2023, Towngas Smart Energy successfully issued its first 1-year and 3-year Panda Bonds on the Chinese mainland, raising a total of RMB 1.5 billion with an average annual interest rate of 3.27%. Among them is the first sustainability-linked Panda Bond issued by a Hong Kong enterprise on the Chinese mainland. Market response was enthusiastic with an oversubscription of 1.6 times.

Today, the Group has implemented the development of nearly 130 zero-carbon smart industrial parks and developed renewable energy projects in 23 provincial regions. The business covers various integrated energy service areas, including photovoltaics, energy storage, battery charging and swapping, power trading, carbon trading, engineering services, and digitalisation.

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In 2022, Towngas Smart Energy became the first energy company to issue a sustainability-linked bond in Hong Kong, raising a total of US$200 million. This bond symbolises our vision of a smart energy business based on integration, digitalisation and decarbonisation. This bond symbolises our vision of a smart energy business based on integration, digitalisation and decarbonisation. The Bond is issued with reference to the Sustainability-Linked Financing Framework, which aligns with the Sustainability-Linked Bond Principles and Sustainability-Linked Loan Principles of ICMA.

Since 2021, the Group has actively expanded into renewable energy, aiming to integrate traditional city-gas operations with photovoltaic initiatives to achieve synergies. However, in light of changes in the macroeconomic environment and the economic turbulence in China caused by the pandemic, the Group was not able to meet its original targets for solar photovoltaic rollout and has adjusted its business development strategy in the renewable energy sector starting in 2023. We are transitioning from an asset-heavy model (such as building photovoltaic power stations) to an asset-light model (including energy management services, energy storage, and technology licensing) to reduce capital expenditure risks and enhance business flexibility, better aligning with our long-term development goals.

Looking ahead, the Group will explore the potential of existing assets and place greater emphasis on the asset-light model. We are committed to optimising resource allocation, improving energy management efficiency through digital platforms, and promoting sustainable growth. Additionally, we will continue to explore innovative business models to meet the ever-changing market demands, ensuring our competitiveness and leadership in the renewable energy sector. We will continue to update investors on our smart energy progress regularly.

For more details, please refer to the Sustainability-linked Financing Framework.

In 2023, The Hong Kong and China Gas Company Limited, the Group’s parent company, and IDG Capital jointly established the first Zero-carbon Technology Investment Fund on the Chinese mainland with the theme of “technology investment + scenario-based empowerment”. With 5 billion raised in the first phase, the fund primarily invested in zero-carbon technology-related fields such as solar energy, wind energy, powered battery, energy storage, smart grid, hydrogen energy, as well as carbon trading and management. Leveraging the Group’s diverse business scenarios, the fund will help investees speed up the development and application of their products and technologies, and continuously explore innovative zero-carbon technologies and solutions, facilitating energy conservation and emission reduction for industrial and commercial customers.