MANILA, PHILIPPINES - The Asian Development Bank (ADB) is funding a pilot program in Guangdong to bring energy-efficient technology to major power consumers in the heavily industrialized southern province of Guangdong, the People’s Republic of China (PRC).

Under the Guangdong Energy Efficiency and Environment Improvement Investment Program, ADB is providing long-term, low-cost financing in the form of a $100 million multi-tranche loan to the Guangdong Provincial Government (GPG). GPG will use the funds to grant loans to major energy consumers, funding projects to retrofit plants and buildings with energy-efficient technology.

“Saving energy can be as simple as changing the type of lighting, using a more efficient motor or installing an energy-efficient air-conditioning system,” said Siew Fing Wong, Senior Financial Analysis Specialist of ADB’s East Asia Department. “Taken separately, these initiatives yield small savings for a single energy consumer; however, taken together, they can save a community the equivalent of a large power plant.”

The ADB loan will be issued in two to four tranches, with the first tranche of $35 million. A grant of up to $800,000 will also be provided by the Clean Energy Fund under the Clean Energy Financing Partnership Facility, a funding mechanism that helps fast-track the implementation of clean energy projects. The grant, to be jointly managed by ADB and PRC, will be used to improve the capability of PRC to pursue energy efficiency projects.

“Improving energy efficiency is a high priority for the Guangdong Provincial Government to help address both energy security and environmental issues,” said Ms. Wong. “The province is a good setting for the investment program because of its vibrant economy and the huge impact that energy savings will have given its highly industrialized state.”

Nine subprojects will be covered by the first tranche. They will promote energy savings by installing more efficient equipment at energy intensive facilities in existing industrial and commercial establishments. The group of projects is expected to yield annual energy savings of 188 gigawatt-hours (GWh), 62,190 tons less coal consumption yearly and $15 million in annual savings for energy consumers. The projects will serve as models for later projects in the province and throughout the country.

The full implementation of the investment program is expected to lower coal consumption by 175,813 tons every year and result in annual energy savings of 533 GWh. End-users will also benefit from an estimated $43 million in savings in their electricity bills.

Since 1995, Guangdong has seen its population expand 2.2% annually, its gross domestic product grow 14% a year, outpacing the national average of 9.5%, and its power demand rise 13% annually, faster than its capacity increased.