Recently, the Ministry of Agriculture ("MOA") and the Agricultural Bank of China ("ABC") have jointly issued the Circular on Promoting Financial Support for the Green Development of Agriculture (the "Circular").
The Circular sets forth requirements in four respects, including "giving support to the construction of agricultural infrastructure", calling for innovating green financial products, improving supporting policies in credit loans and exploring the mode of financial services through multilateral collaboration. The Circular also specifies that active support will be presented to the construction of agricultural infrastructure, such as major water conservancy projects, high-standard farmland and marine ranching, as well as to construction projects for rural infrastructure that are under the government plans at or above the provincial level, provided with stable cash flow for business operations, and secured in respect of repayments and guarantee; additionally, it is encouraged to operate these projects under the market-oriented modes, such as the PPP mode, the guidance of industry funds, and the investment and loan linkage. Furthermore, the Circular directs agricultural banks at all levels to grant authorization in a dynamic manner according to the extent of credit authorization, study to work out rules concerning client ratings and project reviews for agriculture green development projects, and relax requirements on the length of maturity, grace period, debt-service coverage ratio, yield rate, etc., to a proper extent.