(Yicai) June 28 -- China's issuance of local government bonds soared over 25 percent in the first five months of the year from a year earlier, according to the latest official data.

Chinese local governments issued CNY2.82 trillion (USD388.1 billion) worth of bonds in the five months ended May 31, of which CNY1.37 trillion were used to repay debts, and CNY1.45 billion were used for major projects, such as infrastructure construction, industrial parks, and transportation, the Ministry of Finance said yesterday.

About CNY1.16 trillion of the CNY1.45 trillion used for major projects were new special-purpose bonds, MOF data showed. Thirty-six percent were invested in infrastructure projects and about 21 percent in transportation infrastructure projects, according to corporate information platform Qiye Yujingtong. Urban village renovation, healthcare, agriculture, forestry, and water resource projects also received large investments.

The local government debt issuance scale varied from province to province. The most developed provinces with low debt risks and well-planned project presentations issued the largest amount of bonds between January and May, mainly because they received higher quotas.

Guangdong, China's largest provincial-level economy, issued CNY327.7 billion (USD45.1 billion) worth of bonds in the first five months of the year, ranking first, followed by Shandong province at CNY261.1 billion. Nine other provinces, including eastern Zhejiang and Jiangsu, saw their figures exceed CNY100 billion.

In March, the National People's Congress approved a new annual debt limit for local governments of CNY4.62 trillion.

China's local government debt balance was nearly CNY42.4 trillion (USD5.8 trillion) at the end of last month, with the existing bonds having an average maturity of 9.2 years and an average interest rate of 3.21 percent.

Editor: Futura Costaglione