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| China Clean Development Finance Program |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 28059 |
| Company name | China Clean Dev Client |
| Country | China |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pend PDS-ER |
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| Date SPI disclosed | May 7, 2009 |
| Projected board date | June 8, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| This project consists of an IFC investment of up to $38 million equivalent in a Risk Sharing Facility. IFC’s investment aims to provide risk coverage for a portfolio of $150 million equivalent eligible SME loans, originated by Industrial Bank (“IB” or the “Bank”), financing energy efficiency (“EE”) and renewable energy (“RE”) projects. |
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| Project sponsor and major shareholders of project company |
| Founded in 1988, IB is headquartered in Fuzhou City, Fujian Province, and is a leading national joint-stock commercial bank with branches in more than 40 major cities in China. IB is listed on Shanghai Stock Exchange (Stock Code: 601166) with total assets of $150 billion and total equity of $7 billion. Driven by its strong commitment to environmental and social responsible lending practice and its success in EE financing, IB was the first Chinese financial institution to sign up for Equator Principle. |
| Total project cost and amount and nature of IFC's investment |
| IFC’s investment in the project will be up to $38 million equivalent in the form of a risk sharing facility. |
| Location of project and description of site |
| The project will be managed across China. |
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| Anticipated development impact of the project |
| This project will have very positive impacts on the development of China’s EE sector. With the increased investment amount and SME focus, this project will help IFC to support a significantly larger number of EE projects which specifically assist SMEs to adopt high environmental standard and achieve energy cost savings. |
| IFC's expected development contribution |
| IFC has over ten years of experience in EE financing. IFC leveraged its past experience and fits it into new programs. In China, EE finance is a relatively new and under-developed sector because of “high risk” perceived by commercial banks and private investors. As a result it is difficult for EE projects to get financing from traditional funding channels although the projects yield tangible social and commercial benefits. In addition, access to SMEs has been a difficulty in China. During economic downturn, the issue has become more severe. The proposed Project is designed to help fill this gap by providing risk coverage and technical assistance. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the participating banks’ portfolio/pipeline activities proposed to be supported by this facility for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of: The IFC FI Exclusion List, The applicable National Social and Environmental Laws and regulations, and/or The IFC Performance Standards.
IFC will also review, if required, the capacity of the banks availing of the RSF to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the project will be required to:
Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC
Identify responsible, qualified persons to manage and implement the SEMS
Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements
Submit a periodic report to IFC as per a format to be provided by IFC |
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| For inquiries about the project, contact: |
Industrial Bank Co., Ltd.
No. 154 Hudong Road, Fuzhou, PRC
Telephone: (86) 591-87824863
Fax: (86) 591-87842633 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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