Peak Pacific Investment Company

completed

China suffers from severe air pollution problems caused by huge numbers of small, inefficient, coal-fired heating boilers that supply steam to residential, commercial and industrial customers. Central CHP plants, such as those operated by PPIC, are more efficient and thus generate steam using much less fuel. This enables the shutdown of many of these small boilers, thus reducing regional air emissions (including greenhouse gases) as well as generating substantial cost savings. Unfortunately, Government of PRC environmental regulations are inadequately enforced, and even relatively new CHP plants are non-compliant and sub-optimally managed. The project will have a strong development impact by demonstrating that environmentally compliant, well-managed CHP plants can be financially viable in the PRC market, thus setting a benchmark for other operators. IFC’s involvement will ensure that existing plants are environmentally upgraded to the extent practical and that new units meet international emissions levels.The World Bank Group Country Assistance Strategy for China calls on IFC to assist China in establishing a more private sector-oriented framework for infrastructure development. Another major objective of the WBG’s work in China is to assist State-Owned Enterprises (“SOE’s”) in becoming more competitive. In an indirect way, this project does that by providing lower priced steam inputs to industrial SOEs. In addition, the WBG’s strategy for China specifically cites the need to assist the country in reducing the level of air pollution.