What is the purpose of CHUEE? Its goal is to reduce emissions of greenhouse gases in the delivery of energy services in China. CHUEE organizes and provides marketing, engineering, project development, and equipment financing services to commercial, industrial, institutional and multi-family residential sector energy users. These services directly support the implementation of energy efficiency improvements and renewable energy projects.
By how much can CHUEE reduce greenhouse gas emissions? Since its inception in 2006, CHUEE has cut approximately 18 million tons of greenhouse-gas emissions per year. This is the more than the annual emissions of 25 medium-sized coal-fired power plants.
Why was CHUEE created? CHUEE was created in response to a request to the IFC from the Chinese Ministry of Finance’s Global Environmental Facility Focal Point to design and implement a new private-sector based energy efficiency and/or renewable energy finance initiative.
What are the GEF, IFC and IFC Advisory Services China? What roles do they play in CHUEE?
The Global Environment Facility (GEF), established in 1991, helps developing countries fund projects and programs that protect the global environment. GEF grants support projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. CHUEE is supported by GEF funds under the Climate Change focal area.
The International Finance Corporation (IFC) is a member of the World Bank Group, and the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit www.ifc.org.
IFC Advisory Services China, initially known as the China Project Development Facility (CPDF), was established in 2001 in Chengdu as a multi-donor facility managed by the IFC to support small and medium-size enterprise development in Sichuan.
Its aim is to contribute to sustainable private sector development across China, especially in less developed Western regions. Other donors supporting these operations include the United Kingdom Department for International Development, the Ministry of Trade and Industry of Finland, the governments of Norway and Australia, and the GEF. IFC Advisory Services China provides in-country management, administration and operational support to the CHUEE Program Management Office.
Can I take part in CHUEE?
CHUEE is designed to engage different stakeholders by building on their own self-interest, taking advantage of their strengths, and making it as simple as possible to participate. It leverages the interests of three distinct industries (energy utilities, energy efficiency equipment and service suppliers and financial institutions) to generate investment through multiple market channels. CHUEE welcomes any of the following to join the program:
Financial Institutions Commercial banks are selected to provide loans for energy efficiency equipment and projects. Bank lending will be supported by an IFC risk-sharing facility. Under this structure, IFC provides partial first and second loss risk coverage to the partner banks, who in turn partner with utilities to generate highly scalable and standardized equipment loans. The Program will build energy efficiency finance capacities and experience within its partner financial institutions. The sustainability of the Program will be linked in part to its continued success in helping financial institutions develop sustainable lending businesses for energy efficiency projects.
IFC has extensive experience providing environmental finance as well as training and building the capacity of financial institutions, small and medium-sized enterprises relating to energy efficient projects.
Energy Efficiency Equipment and Service Suppliers Companies that manufacture, sell and deliver energy efficiency products have critical roles in marketing and delivering energy efficiency projects and services. They benefit from increased sales of their products facilitated through the aggregation of customers, enhanced access to finance for energy efficiency projects, and Global Environment Facility-supported technical assistance to build capacity.
Energy Management Companies (EMCs) IFC and its partner banks cooperate with Energy Management Companies -- consultancies who advise on planning and implementing energy efficiency projects -- by facilitating knowledge sharing and the exchange of good industry practices. They are playing an increasingly important role in promoting the application of energy efficiency technology and methodology to energy end-users in China. IFC also helps partner banks build relationships with prominent equipment suppliers. Through these partnerships, banks can better market energy efficiency/renewable energy loans, diversify risks, and replicate deals.
Through the CHUEE Program, IFC has also built a strong repertoire of business cases and shares them with clients to help initiate more successful projects.
Energy End-users The types of end-users range from industrial and commercial to small and medium-sized enterprises, as well as municipal, institutional, and multi-family residential sector customers. These end-users are seeking to develop, finance and implement energy efficiency projects to minimize their energy costs.
Find out more about the CHUEE Program’s focus on Small and Medium Enterprises.
What benefits can CHUEE bring to its partners?
Financial Institution Partners Local commercial banks are selected to establish partnerships with IFC to participate in the Program. Banks provide energy equipment loans and related loan origination and administration services. IFC provides:
a risk sharing facility to share with the bank in credit risks of loans, which the banks will fund with their own resources, and
substantial technical assistance to improve bank credit risk management practices, support marketing of bank financial services and prepare energy efficiency projects for investment.
Energy Efficiency Suppliers CHUEE creates a network of qualified energy efficiency suppliers who can deliver necessary energy efficiency equipment and services. Energy efficiency suppliers will market their projects and services to customers in coordination with the utility.
The Program recruits international energy efficiency equipment suppliers to China as part of its market development activities to promote expanded access to energy efficiency technology. It also improves the quality of energy efficient equipment by providing training, capacity building and other business development services to participating energy efficiency suppliers.
Finally, CHUEE works with partner banks and energy efficiency suppliers to develop multiple marketing channels to generate energy efficiency project deal flow, in addition to the utility channel.
Energy End-users CHUEE supports end-users in making equipment purchase decisions based on equipment life-cycle and energy operating costs, and not just low first costs.
What kind of technical assistance can CHUEE partners receive?
Financial Institutionsare eligible for substantial technical assistance to improve bank credit risk management practices, support marketing of bank financial services and prepare energy efficiency projects for investment.
Energy Efficiency Suppliers participating in the Program receive training, capacity buildingand other business development services focusing on marketing and finance.
End-users are provided with services covering the full energy efficiency project cycle, from energy audit and project feasibility studies, through decision-support, equipment procurement and financing.
What is a risk-sharing Facility? With the IFC's Risk-Sharing Facility, banks will make loans accessible to a broader set of customers and on more attractive terms with tenors of three to five years. The IFC's Risk-Sharing Facility is structured on private-sector oriented commercial terms encouraging the development of capital markets towards international standards.
What is an energy efficient supplier network? CHUEE has a network of qualified energy efficiency suppliers who can deliver necessary energy efficiency equipment and services. Energy efficiency suppliers will market their energy efficiency projects and services to customers, in coordination with the utility. The IFC will conduct Request for Information processes to solicit information from equipment and service providers. This information will be used by utilities and provided to customers. CHUEE will support end-users in making equipment purchase decisions based on equipment life-cycle and energy operating costs, and not just low first costs.