China's Zhejiang Geely Holding Group has raised US$400m through a 'green' bond issue to fund the development of a hybrid successor to the black cab at its London Taxi Company (LTC) subsidiary.

The company aims to use the proceeds of the bond issue to bring to market a zero-emission hybrid successor to the iconic TX4 taxi. The current model uses a 2.5-litre turbodiesel engine supplied by Italy's VM Motori.

A concept model was unveiled in London last October, during the state visit of China's president Xi Jinping. 

The company aims to begin commercial production of the TX5 taxi in the fourth quarter of 2017. It will go on sale in the UK at the end of 2017 and in overseas markets in 2018.

Geely is spending GBP300m at the Ainsty facility in the UK's West Midlands for the development and production of the new model. 

London is the largest market for the iconic black cabs and it requires all new taxis to be zero-emission vehicles from the beginning of 2018, according to reports. 

Geely, which also owns Volvo Cars, is taking a lead in environmental technologies. The company has set itself a target for 90% of its sales to consist of new-energy vehicles, including electric vehicles and hybrids, by 2020.