China Utility-Based Energy Efficiency Finance Program

completed

_x000C_The proposed China Utility-Based Energy Efficiency Finance Program (“the Program”) entails an IFC investment of up to RMB ￥405 million (approximately US $50 million at today’s exchange rate), in Risk Sharing Facilities (“RSF”) for 2-3 participating commercial banks in China to support up to RMB ￥932 million (approximately US $115 million equivalent at today’s exchange rate) energy efficiency (“EE”) equipment loans, mostly to small-and-medium sized energy users. The Program has three key developmental objectives: - Pro-active engagement with IFC portfolio and non portfolio banks in China to improve current lending and risk management practices and; - Development of SME lending capacities of IFC’s portfolio and non-portfolio banks;- Promotion of the energy efficiency equipment financing market.The Program is expected to be partially funded by a grant of US$16.5 million from the Global Environment Facility (“GEF”) and a US $3.0 million from Finland’s Ministry of Trade and Industry (MTI). A large portion of the GEF funds, between US$10.0 to US$11.5 million will be used to cover IFC’s RSF liabilities. IFC’s exposure on its own account will be up to RMB ￥312 million on the second loss risk sharing position, calculated at today’s exchange rates. The balance of GEF funding, plus the MTI bilateral donor funding, will be used primarily for engineering services, technical advisory and program management activities. The Program will be implemented by IFC’s Financial Markets Department (“CGF”), the Environmental Finance Group (EFG), and the China Project Development Facility (“CPDF”) through IFC’s Beijing office.