The three-year $500 million China Green Covered Bond, the first such bond to be issued by a Chinese entity and secured by onshore assets, offers investors a coupon rate of 1.875 percent.

The structure of covered bond is innovative, giving investors dual recourse: allowing claims over a dedicated "cover pool" of assets, and the usual claim against Bank of China.

It is likely to be popular among European institutional investors, especially funds with mandates to invest in sustainable projects.

"We regard it our own mission to connect China's promising Green Bond market with London's vibrating capital market," said Bank of China Chairman Tian Guoli.

"This particular green covered bond connects China's onshore green bond market with international investors, via an asset backed structure," he added.

Tian also stressed the significance of the bond's "dual green features", which means the utilization of the funds raised from the bond is in line with international green bond standards, but also the covered assets are is in line with the People's Bank of China's green bond guidelines.

Yi Gang, deputy governor of the PBOC, said the bond has a particular significance in furthering strong UK China collaboration in green finance already achieved at the G20 Leaders Summit in September.

Yi added the bond's listing on the London Stock Exchange is also significant, as London is an international financial center. Yi said he expects more Chinese financial institutions will issue more products in London in the future.

China has led the world in the sale of green bonds so far this year. As of July, it had issued 9.02 billion pounds ($11.23 billion) of green bonds out of the 25.69 billion pounds issued globally.

The numbers reflect robust growth from last year, when green bonds worth 27.46 billion pounds were issued globally and 0.99 billion pounds by Chinese organizations.

Green finance was on the agenda at the G20 Leaders Summit for the first time when China hosted the meeting in Hangzhou, when Beijing and the UK's central bank jointly chaired the G20 Green Finance Study Group which presented a report that was accepted and endorsed by G20 leaders.

The Bank of China's green bond is rated Aa3 by debt rating agency Moody's, which is the sovereign rating of China, signifying its strong credit quality.

Andrew Carmichael, capital markets partner at law firm Linklaters, said the new bond showed both China and the Bank of China's commitment to green finance－and to enabling international investors to have exposure to Chinese domestic green financial assets.