Against the backdrop of the implementation of the “dual carbon” strategy and green transformation in the power industry, green credit is an important financial tool for promoting the low-carbon development of power generation enterprises. This paper takes Chinese listed power generation enterprises from 2013 to 2023 as samples, adopts the difference-in-differences model, measures the green transformation by the ESG performance of enterprises, and uses the issuance of green bonds as a proxy variable for green credit. The impact of green credit on the green transformation of power generation enterprises was empirically tested, and robustness tests were conducted, including parallel trend tests, placebo tests, and time window tests. The results show that green credit significantly promotes green transformation: for every 1% increase in green bond issuance, ESG performance improves by 0.060%. Heterogeneity analysis indicates that green credit significantly improves the environmental (E) and social (S) dimensions, but has no significant impact on the governance (G) dimension. Enterprise scale and cash flow have a positive impact on ESG performance, while leverage ratio and duality have a negative impact. Finally, policy recommendations are put forward to the government, financial institutions, and enterprises to provide empirical support for the low-carbon transformation of the power industry.