BEIJING — China will establish a green financing mechanism to facilitate the economy’s transition featuring sustainable growth, a senior official of the Ministry of Finance (MOF) told Xinhua on Sept 2.

According to the guidelines released on Aug 31 by the People’s Bank of China (PBOC) and six other central authorities, China will be the first country worldwide to establish a green financing mechanism.

Among the multitude of incentives proposed to promote green finance, the guideline suggested the establishment of a green development fund, which could reduce investors’ financing costs or boost their profits.

The MOF will integrate several special funds on energy conservation and environment protection to provide funding for the green development fund and invest in green industry, a strong message showing the central government’s commitment to green development, said the unnamed official during an interview with Xinhua.

The official said that local governments will be encouraged to establish funds to encourage more private capital to invest in green sectors.

The MOF has always been an advocate for the green industry. Fiscal expenditure on environment protection in 2015 hit 480.3 billion yuan ($72.8 billion), up 26 percent year on year, according to the official.

More fiscal policies supporting green financing will be implemented, including fiscal interest deduction and public-private partnership (PPP) projects, which will promote the development of green industry and provide a healthy policy environment for green financing, said the official.

Meanwhile, the official said China will continue to enhance international cooperation in the green financing field to attract more investment.

China has included green financing on the G20 agenda for the first time to encourage more investment in environmentally friendly projects and build international consensus around green finance.

China’s economy is undergoing a major structural transformation toward a new development model focused on achieving better quality growth that is more economically and environmentally sustainable, and achieves better social outcomes for the Chinese people.