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Green securitization and other small and medium-sized environmental protection enterprises have been infiltrated in the end how to finance?
Release date:2017/11/13 14:15:57

        Green securitization and other small and medium-sized environmental protection enterprises have been infiltrated in the end how to finance? BOT project government repurchase, equipment lease (financial lease) and other creditor's rights, sewage treatment fees, garbage disposal fees and other income rights, with stable future cash flow, can be used as the basic assets of ABS enterprises, thus providing a possibility for environmental protection enterprises to achieve direct financing through asset securitization. Along with China


        At present, credit and bonds are the main financing channels for environmental protection and industrial enterprises in China. Internationally, financial leasing, trust and asset securitization are also important ways for enterprises to finance. It is found that financial leasing, trust and asset securitization have all gone through the process of introduction in the 1970s and 1980s, 

        interruption in the 1990s, restart after 2000 and vigorously promote after 2015. According to the survey, these new financing channels have penetrated into various fields, and gradually began to apply in the field of environmental protection.

Application of New Financing Model in Environmental Protection


        The application scope and form of financial leasing in the field of environmental protection are expanding day by day


        Financial leasing is a special financial business, which means that the lessor purchases the leased items selected by the lessee, provides financing services for the latter, and then leases the items to the lessee for a long time on the condition of rent collection. Financial leasing takes leasing as its representation and financing as its essence.


        At present, many financial leasing companies, such as Xingye leasing and Huarong leasing, including foreign trade leasing, HSBC leasing and Pufa leasing, are gradually expanding their business to energy-saving and environmental protection industries. Since 2010, financial leasing has been gradually applied in the field of solid waste treatment and disposal, sewage treatment and pipeline network, air pollution prevention and control, comprehensive environmental management and other sub-areas (Table 1).

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        Overall, the number of environmental protection enterprises financing through financial leasing is increasing, and the scale of financing is increasing year by year. The subject matter of financial leasing is gradually expanding from a single environmental protection equipment to engineering and subsidiary rights and interests, and the form of financial leasing is more flexible. Customers aiming at purchasing environmental protection equipment mostly choose direct leasing mode, while financing customers with their own equipment and assets mainly choose after-sale leaseback mode.


Asset Securitization (ABS) has begun in some industries


        Asset securitization (ABS) refers to the transformation of an asset pool consisting of illiquid assets with future cash flow income into securities that can be sold and circulated in financial markets through structural restructuring. Asset securitization mainly includes credit ABS, enterprise ABS and bill ABN. Among them, ABS pilot started in 2005.


        In the field of environmental protection, the government repurchase of municipal engineering BT, BOT project, equipment lease (financial lease) and other creditor's rights, such as sewage treatment fee and garbage disposal fee, have stable future cash flow and can be used as the basic assets of ABS, thus providing the possibility for environmental protection enterprises to realize direct financing through asset securitization. With the issuance of ABS products by Huaneng Lancang River Hydropower and Nanjing Urban Construction Sewage Treatment Enterprises, asset securitization has begun in hydropower, infrastructure construction, environmental protection and other industries (Table 2).

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Green Trust has begun to penetrate into the field of environmental protection


        Trust is a special property management system and legal act. It refers to the act that the trustee entrusts his property to the trustee on the basis of trust in the trustee, and the trustee manages or disposes of it in his own name and for the benefit or specific purpose of the beneficiary according to the wishes of the trustee. Trust is a property management system based on trust, which is flexible and adaptable. On October 4, 1979, China International Trust and Investment Corporation (CITIC) was founded under the personal advocacy and approval of Deng Xiaoping, the chief designer of reform and opening up, which marked the formal resumption of the trust industry. In 2001, with the promulgation of the Trust Law of the People's Republic of China, trust entered a "new trust era" of sound development. At the end of 2015, the trust assets managed by 68 trust companies in China amounted to 16.3 trillion yuan, and entered the era of 16 trillion yuan.

According to the data disclosed by China Trust Association, although the number is still small, domestic trust companies have begun to cooperate with environmental protection enterprises in "green trust" (Table 3).

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        Advantages of New Financing Model in Environmental Protection

Compared with traditional credit, the advantages of financial leasing, asset securitization, trust and other modes are as follows:


        Firstly, financial leasing, asset securities and trust belong to off-balance-sheet financing, which is not reflected in the financial statements of enterprises, so it does not affect the credit status of enterprises. At the same time, financial leasing and asset securitization are not limited by the main body's credit and solvency, and there is no limit on the proportion of net assets. The scale of financing is discounted according to future cash flow. Therefore, the threshold of financing is lower than credit. The low threshold and off-balance-sheet financing characteristics of these two financing modes are more suitable for small and medium-sized environmental protection enterprises.


        Second, financial leasing and asset securitization can alleviate the pressure of cash flow and solve the problem of capital. In the construction of environmental protection projects, financial leasing can provide financial support for BOT projects. From the point of view of project financing, BOT projects in sewage, solid waste treatment and other fields generally need a lot of funds, and the recognition of franchise as pledge by local governments and banks is not high. From the point of view of project cash flow, BOT project needs a lot of funds to purchase equipment in the early stage of construction, but it can not produce stable cash flow, so it is difficult to obtain bank loans, resulting in the imbalance of funds and supply, affecting the progress of the project. However, financial leasing, asset securities


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