(Yicai Global) Dec. 31 -- China’s central bank has issued the first batch of low-cost loans to financial institutions through a new carbon emission reduction facility aimed at helping the country achieve its stated goal of reaching carbon neutrality by 2060.

The People’s Bank of China has extended CNY85.5 billion (USD13.4 billion) via the new financing tool, underpinning CNY142.5 billion (USD22.4 billion) of green loans financial institutions have issued, Sun Guofeng, head of the PBOC’s monetary policy division, said at a press conference yesterday, Securities Daily reported today.

That has helped as many as 2,817 companies, driving a reduction in carbon emissions of 28.76 million tons, Sun added.

Unveiled last month, the facility is an ‘additional means’ to support the development of three key areas to cut carbon emissions: clean energy, energy conservation and environmental protection, and carbon emission reduction technologies.

The PBOC will provide financial institutions with funds equal to 60 percent of a loan’s principal at an annual interest rate at 1.75 percent through the facility, it said on Nov. 8.

The State Council, China’s cabinet, also established on Nov. 17 a CNY200 billion (USD31.4 billion) special relending facility to promote the clean, safe, efficient, green, and smart coal mining, coal’s clean and efficient processing, and coal power’s clean and efficient use.

That financial assistance is in addition to a relending tool the PBOC rolled out in the same month that will provide 100 percent of the loan principal financial institutions extend for carbon emission cuts, also at an annual interest rate of 1.75 percent.

China aims to hit peak emissions by 2030 and achieve carbon neutrality by 2060, President Xi Jinping said in September last year.

Editor: Futura Costaglione