A Study on the Financing Motives and Effects of Carbon-Neutral Bonds in the Green Power Industry: A Case Study of China Three Gorges New Energy

With the escalating climate crisis, fossil fuel consumption has led to global warming and a series of environmental challenges. The green power industry plays a significant role in alleviating the energy crisis and reducing environmental pollution. In recent years, Chinas green bond market has seen continuous growth and improvement. As an innovative form of green bond, carbon-neutral bonds are vital tools for achieving sustainable development and offer a new financing channel for green power enterprises. This study aims to explore the financing motives and effects of carbon-neutral bonds within the green power industry. Focusing on Chinese green power enterprises that issue carbon-neutral bonds, the study uses China Three Gorges New Energy as a case example, employing event study and financial analysis methods to examine the market response and financial impacts of carbon-neutral bonds. Data for this research were sourced from cninfo.com and the CSMAR database. The findings reveal that China Three Gorges New Energys primary motives for issuing carbon-neutral bonds include enhancing its green reputation to attract stakeholder support, reducing financing costs, and optimizing its financing structure. The issuance of this carbon-neutral bond demonstrated favorable market, financial, and environmental effects. This research provides an in-depth micro-level analysis of the specific applications of carbon-neutral bonds in the green power industry and offers guidance for future corporate carbon-neutral bond issuances.