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| Asia Environment |
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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 | 25633 |
| Company name | Asia Environment Holdings Ltd |
| Country |
| China |  |
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| Sector | Water and Wastewater Utilities |
| Environmental category | B |
| Department | Reg Ind, Infra & Nat Res, ASIA |
| Status | Active |
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| Date SPI disclosed | October 3, 2007 |
| Projected board date | November 5, 2007 |
| Previous Events | Invested: April 14, 2008
Signed: November 29, 2007
Approved: November 28, 2007 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Asia Environment Holdings Ltd. (Asia Environment or the company) is a holding company incorporated in Singapore. Through its subsidiaries, it provides integrated water and wastewater treatment products and services to municipalities and industries, primarily in China. The company is based in Yixing, China, and publicly listed on the Singapore Stock Exchange since December 2003. Over the years, Asia Environment has emerged as one of the leading local players in the Chinese water treatment industry. It specializes in the research and development of treatment technologies, the manufacturing of treatment equipment, provision of turnkey services related to wastewater treatment systems, and more recently has expanded into the investment in and management of large-scale Build-Operate-Transfer/Transfer-Operate-Transfer (BOT/TOT) water and wastewater projects. |
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| Project sponsor and major shareholders of project company |
| Asia Environment was founded in 1984 by Mr. Wang Hongchun, the current CEO, and his father together with 16 other former employees. His brother Mr. Wang Chunlin, the current Chairman, joined his brother in the business in 1987. Mr. Wang Hongchun and Mr. Wang Chunlin are jointly the Sponsors of this project. Mr. Wang Hongchun has been overseeing the operations of the company for over 20 years. He has been involved in the research and development of various water and wastewater treatment products. His brother Mr. Wang Chunlin has been working with the company for 20 years in a variety of positions, and was appointed Chairman in 1996. As of March 12, 2007, 53.9% of the company’s shares were publicly held, with the Sponsors owning 29.2%, Tee Yih Jia Food Manufacturing Pte Ltd owning 11.3%, and Mr. Yao Maohong owning 5.5%. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is a loan of up to $15 million for IFC’s own account. It is proposed that IFC also receive detachable warrants giving IFC the right to subscribe up to $10 million of common equity of Asia Environment at a future date. The funds and the proceeds will be used to primarily to finance the company’s investments in additional large-scale BOT/TOT water and wastewater projects. |
| Location of project and description of site |
| Asia Environment is based in Yixing, in the Jiangsu province of China. However, the company’s projects are located in various provinces of China. |
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| Anticipated development impact of the project |
| China is facing serious challenges in terms of water shortage and environmental pollution. By contributing to improved water quality in China, the project will result in public health improvements, including a reduction in water-borne diseases. The project will also demonstrate the ability of the private sector to operate successfully in the water and sanitation sector, which is crucial to China’s sustainable development. |
| IFC's expected development contribution |
| IFC’s support of the project will help to address China’s water pollution problems by supporting a qualified private player in the wastewater sector. Furthermore, IFC’s financing will help in the success and timeliness of the company’s expansion plans by providing the company with reliable longer term financing, as well as raising the level of confidence of international investors which in turn will allow the company to raise funds more efficiently. IFC’s participation will be fully supportive of the current liberalization policies of the Government for the sector, which has the potential to attract more and more private investment in the near term. Lastly, IFC has an opportunity to advise the company on best practice in the environmental and safety areas. |
| Environmental and social issues - Category B |
| This is a Category B project because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The company’s wastewater equipment manufacturing business pose the typical, limited pollution control, waste management, and occupational health and safety issues found in small-scale, general manufacturing activities. Because Asia Environment’s engineering and construction activities contribute to cleaning-up water pollution generated by others, these activities are essentially supporting industry and government clients in managing a broader set of environmental and social impacts and risks over which these parties have control. In the same way the company’s large-scale municipal water/wastewater business is primarily driven by the assessment and management of environmental and social performance conducted by responsible government authorities as part of their original planning activities. Notwithstanding, a condition of IFC’s investment going forward will be that any and all BOT-type projects undertaken shall consider all relevant social and environmental risks and impacts, including the issues identified in PS1 through PS8. |
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| For inquiries about the project, contact: |
Koh Poh Yeok, CFO
Asia Environment Holding Ltd.
77 Robinson Road #15-01
SIA Building
Singapore 068896
Website: http://www.asiaenv.com |
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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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