OIL refiner Jiangsu Eastern Shenghong Co. has issued a green bond worth 1 billion yuan (US$140.60 million) to help fund a major petrochemical complex, becoming the latest Chinese company to use green financing to develop fossil fuels.

The bond is the largest single green corporate bond issued by a privately owned firm in China, while the Shenzhen-listed firm is a listed branch of major refining corporation, Shenghong Group.

Chinese coal, oil and gas producers are allowed to use green financing to pay for clean technology and efficiency upgrades, but regulators have been under pressure to pull rules closer in line with international standards that ban such kinds of funding.

Chinese financial institutions provided at least US$1 billion in green financing to coal-related projects in the first half of this year, a review of financial data showed.

Shenghong’s bond, with a 6 percent coupon, is a non-public offer, the firm said in a statement.

Proceeds will be used to fund oil refining facilities at the company’s 16-million-ton-per-annum petrochemical project, due to start operations in 2021.

The plant’s green credentials derive from its energy efficiency, which will exceed national standards.

China’s private refiners have spent heavily to build new giant petrochemical complexes amid a push by the government to boost high-value added chemical production.

Another independent oil refiner, Rongsheng Petrochemical, cited market volatility when it scrapped a plan in June to issue a green bond of up to 4 billion yuan that had secured approval from the securities regulator.

(SD-Agencies)