Green Transformation of Agriculture Through Financial Innovation
Panzhihua City, a national modern agricultural demonstration zone, is leveraging its abundant solar and thermal resources to develop specialty agriculture, with particular focus on the green transformation of its mulberry industry. The People’s Bank of China (PBC) is supporting this agricultural transition through innovative financial instruments like “carbon-linked loans,” creating a win-win scenario for both rural economies and ecological sustainability. Companies such as Sichuan Heijinshen Sunshine Agriculture Co., Ltd. have utilized these financial tools to reduce energy consumption and enhance product value, successfully achieving synergistic economic and ecological benefits.
Located in the subtropical dry-hot valley climate zone, Panzhihua has been designated as a national modern agricultural demonstration area, one of China’s first distinctive agricultural product advantage zones, and a national three-dimensional agriculture demonstration site. Benefiting from unique climatic conditions, the region produces fresh fruits year-round, with its “Panguo” brand gaining nationwide recognition for standardized, traceable, and high-quality specialty products.
Mulberry Industry Leads Agricultural Green Transition
In recent years, Panzhihua has taken the mulberry industry as a breakthrough point in exploring new pathways for agricultural green transformation. Under the guidance of the PBC Panzhihua Branch, local banking institutions have introduced innovative transition finance tools such as “carbon-linked loans” to inject low-carbon momentum into specialty agriculture. Since the pilot implementation of agricultural transition finance standards, multiple agricultural transition loans have been successfully issued in Panzhihua.
According to statistics from the PBC Panzhihua Branch, by the end of April, loans meeting the agricultural transition finance support directory in Panzhihua had reached 87.6 million yuan in credit approvals. Among these, standardized transition loans with properly formulated transition plans accounted for 13.6 million yuan in approved credit, with an outstanding balance of 6.8691 million yuan. The branch has guided three different types of agricultural enterprises in developing customized transition plans.
New Processing Technologies Reduce Energy Consumption
“Fresh mulberries are delicate and easily damaged, while traditional processing methods are energy-intensive with low added value, making it difficult to extend the industrial chain,” admitted Liu Maoxiang, head of Sichuan Heijinshen Sunshine Agriculture Co., Ltd. As a leading mulberry deep-processing enterprise in Panzhihua, the company utilized transition finance tools like “carbon-linked loans” from Sichuan Bank’s Panzhihua Branch to introduce intelligent heat pump drying production lines. This technology transforms fresh fruits into high-value-added products like preserved fruits and enzymes, reducing unit energy consumption by 30% and achieving an annual carbon reduction of 800 tons. This transformation was made possible with the deep involvement of the PBC Panzhihua Branch.
Following the pilot requirements of the PBC’s “Catalog of Economic Activities Supported by Agricultural Transition Finance,” the PBC Panzhihua Branch guided Sichuan Bank’s Panzhihua Branch to create customized transition financing solutions for enterprises. A 1.6 million yuan loan was precisely allocated to three key areas: equipment upgrades, cold storage renovation, and new product research and development. “The loan features a ‘carbon-linked’ floating interest rate mechanism. According to the enterprise’s transition plan, if carbon emission intensity can decrease by 20% by the end of 2025 compared to 2020 levels, they will qualify for interest rate reductions and loan renewal without principal repayment,” explained a representative from Sichuan Bank’s Panzhihua Branch.
Policy and Market Dual Drivers for Transition
Under the coordinated promotion of the PBC Panzhihua Branch, Panzhihua has established a “policy guidance + market-driven” agricultural transition finance ecosystem. On one hand, the PBC Panzhihua Branch has collaborated with municipal departments to incorporate agricultural transition finance into municipal financial interaction policies, providing dual incentives to banks issuing transition loans and enterprises actively developing transition plans. On the other hand, the branch has facilitated market-driven consortiums between pilot banking institutions and third-party organizations, creating innovative regional cooperation mechanisms to establish comprehensive service systems for transition plan evaluation and carbon footprint accounting.
“We strictly followed the PBC’s ‘Transition Finance Standard Usage Guidelines’ in designing our products to ensure precise financial support for green production processes,” stated a representative from Sichuan Bank’s Panzhihua Branch. The case of Heijinshen Company has been included in the PBC Panzhihua Branch’s agricultural transition project database. The “enterprise + base + farmers” model has driven the construction of over 20,000 mu (approximately 1,333 hectares) of standardized planting bases, increasing annual income by more than 10,000 yuan for hundreds of farming households.
Financial Transition Creates Agricultural Win-Win
With the deepening penetration of transition finance, Panzhihua’s agriculture sector is achieving dual benefits in economic and ecological terms. Panxiangyuan Agricultural Product Development Co., Ltd., which also utilized agricultural transition loans, has successfully marketed carbon-footprint-certified mango products with “carbon labels” in premium markets in Beijing, Shanghai, Guangzhou, and Shenzhen, as well as exporting to Southeast Asian markets like Laos. Meanwhile, Sichuan Heijinshen Sunshine Agriculture Co., Ltd. reported a 143% year-on-year revenue growth in 2024, with newly developed products like mulberry leaf tea powder further improving raw material utilization rates.
“Agricultural transition finance must not only calculate the ‘ecological account’ but also play the ‘specialty card,'” emphasized a representative from the PBC Panzhihua Branch. As a provincial green finance innovation pilot city, Panzhihua has developed a distinctive pathway of “Panguo fresh-locking + low-carbon processing + carbon label certification,” integrating various specialty agricultural products like mangoes and mulberries into the transition finance support system. This approach provides a sustainable financial model for rural revitalization.
Sustainable Future for “Panguo” Industry Chain
The successful implementation of transition finance in Panzhihua’s agricultural sector demonstrates how financial innovation can drive both economic growth and environmental protection. By combining policy support with market mechanisms, the city has created a replicable model for agricultural transformation that balances productivity with sustainability.
Looking ahead, Panzhihua plans to expand its transition finance framework to cover more agricultural products and processing technologies. The municipal government, in collaboration with financial institutions, is developing new assessment tools to measure the environmental impact of agricultural practices more accurately. These efforts aim to create a comprehensive ecosystem where financial instruments, technological innovation, and sustainable farming practices work in harmony to build a greener future for China’s agricultural sector.
The case of Panzhihua offers valuable insights for other regions seeking to modernize their agriculture while addressing climate challenges. As transition finance continues to evolve, its role in facilitating sustainable development across various industries will likely expand, contributing to China’s broader carbon neutrality goals.
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