IFC and Industrial Bank signed a cooperation agreement to deepen their collaboration in supporting energy saving and greenhouse gas emission reductions in China on Feb 25, 2008 in Beijing. This is the second phase of the IFC China Utility-based Energy Efficiency Finance Program.
Under the agreement, IFC will provide a $104 million risk-sharing facility to Industrial Bank that will help the bank extend 1.5 billion Chinese renminbi ($210 million) in energy efficiency loans. This initiative is expected to help reduce 5 million tons of carbon dioxide emissions a year, the equivalent of replacing ten 100-megawatt coal-fired power plants in China.
IFC Vice President for Financial Markets, Funds, and Africa Jyrki Koskelo said IFC’s facility for Industrial Bank demonstrates the strategic partnership that the two institutions have established. He added that Industrial Bank is at the forefront of banks in Asia that understand the attractive opportunity that climate change finance presents to achieve competitive advantage.
The two parties have made significant progress in their cooperation on the first phase of the program, which was launched in 2006. In that phase, IFC provided a risk-sharing facility of up to $25 million for Industrial Bank’s “green” loans. In turn, the bank has financed 46 energy efficiency and greenhouse gas emissions reduction projects, for a total loan amount of 900 million Chinese renminbi ($126 million). The majority of these loans are to small and medium enterprises that are implementing energy efficiency projects such as industrial boiler retrofitting, wasted heat recovery, co- and tri-generation projects for district heating, power saving, and optimization of industrial energy uses. Implementation of these projects are expected to reduce carbon dioxide emissions by more than 3.5 million tons a year, the equivalent of emissions from all 70,000 taxis currently running in Beijing for three years.
Senior Chinese government officials from the Ministry of Finance, China Banking Regulatory Commission, and the State Environmental Protection Administration also spoke at the event and called for more financial institutions to take an active part in sustainable financing to help the country achieve the goal of reducing pollutant discharges by 10 percent and energy intensity in GDP by 20 percent by the end of 2010.
IFC Vice President for Financial Markets, Funds, and Africa Jyrki Koskelo shaking hand with Mr. Li Renjie, President of Industrial Bank at the signing ceremony.
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