China Energy Efficiency Financing

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Closed

The objective of the Energy Efficiency Financing Project is to improve the energy efficiency of medium and large-sized industrial enterprises in China, and thereby reduce their adverse environmental impacts on climate. There are four components to the project. The first component is the promotion of energy efficiency financing, it will support the preparation and implementation of two to three industrial energy conservation projects in sectors with large replication potential, but with significant project development difficulties. The objective is to demonstrate effective business models and institutional arrangements for the preparation and financing of energy conservation projects. It will focus primarily on pre-investment activities, such as feasibility studies, due diligence, development of new financing mechanisms, and institutional arrangements. The second component is the energy conservation investment lending. The Participating financial intermediary (PFIs) in turn will lend the funds to industrial enterprises or energy service companies for energy conservation investment subprojects. Their lending rates will be determined based on market conditions and will adequately cover the financial and operating costs and provide for a reasonable profit margin for the PFIs. The PFIs will lend in the same currency denomination in which they borrow their allocation of the International Bank for Reconstruction and Development (IBRD) loan and thus pass all the foreign exchange risk to borrowing enterprises. The PFIs have also agreed to lend, from their own resources, an additional amount equivalent to their respective IBRD loan allocation for energy efficiency investments. The third component is the national policy support and capacity building, it will strengthen the government's capabilities to implement industrial energy efficiency policies and programs, through: (a) assistance to ensure that the National Energy Conservation Center (NECC) is operational and fully functional, through support for organizational start-up and strategic planning. The main responsibility of NECC, approved for establishment by the State Council in August 2006, is to support the implementation of national energy conservation policies and programs; and (b) support to the implementation of priority national energy conservation programs under the 11th Five-Year Plan. This will mainly include a midterm review (2008) of implementation activities to identify problems, make recommendations and assist in implementing remedial measures. Finally the fourth component is the project implementation support, monitoring and reporting.

FY17 - Energy and Extractives

World Bank Group

Project

Manufacturing (Industrial), Commercial, Government