Chinese wood products maker Shouguang Luli Wood was awarded the green loan of the year award for the Asia-Pacific region for its deal to begin ground-breaking production of a sustainable building material in China.

The €89.6 million ($96 million) green loan – backed by the German export credit agency, Euler Hermes – was signed in December 2023 and will be used by Luli Wood to acquire equipment to become the first company in China to produce oriented strand board (OSB).

OSB is manufactured from multiple strips of wood compressed together with adhesive to make a product with similar properties as plywood. Unlike plywood, however, it utilises otherwise discarded wood – such as wood chips and sawdust – and can use much younger, faster growing trees such as bamboo.

After developing factories in the Jiangxi and Hunan provinces, the loan will be used to purchase production equipment from German firm Dieffenbacher to start OSB production.

The green loan was judged as aligned with the Green Loan Principles by second party opinion provider, ERM. It contributes to eligible categories including circular economy, pollution prevention and control, and sustainable management of living natural resources.

Natixis Corporate & Investment Bank (CIB) acted as lead arranger and green loan coordinator on the deal.