Project Name MFF: Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 1
Project Number 39653-023
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2426-PRC: MFF: Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 1
Ordinary capital resources US$ 35.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy - Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact

Project Outcome

Description of Outcome
Progress Toward Outcome Progress being achieved towards outcome. To be assessed upon completion.
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues) As of 30 September2011, total withdrawal accounted 99% of the total loan amount of Tranche-1. Except SGIS Songshan Co., other sub-borrowers of Tranche-1 have withdrawn all of their ADB subloans.
Geographical Location Guangdong Province

Safeguard Categories

Environment FI
Involuntary Resettlement C
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects

An environmental assessment and review framework prepared for the Investment Program concludes that the Investment Program will provide an overall benefit to the environmental conditions in Guangdong. Regional air quality will improve and greenhouse gas emissions will be reduced as the need for coal-fired power will be reduced. The environmental benefits include reduction of coal use and emissions. Based on ADB's Workbook on Economic Evaluation of Environmental Impacts, the total economic value of the quantifiable environmental benefits from reduced air emissions is estimated to be about $7.8 million over the life of tranche 1. Unquantifiable environmental benefits are also significant.

Because the Investment Program deals with only retrofits of existing facilities at consumer sites, the potential environmental impacts are limited to disposal of the replaced electrical and mechanical equipment and appliances. Disposal will comply fully with GPG regulations to minimize any potential impacts. In accordance with ADB's Environment Policy (2002) and Environmental Assessment Guidelines (2003), the first tranche of the Investment Program is classified as FI as all the subprojects have insignificant environmental impacts.

Involuntary Resettlement By including only retrofits of existing electricity consuming facilities, the Investment Program will not involve any land acquisition or resettlement. Therefore, no land acquisition or resettlement plan is needed. Negative social impacts resulting from worker layoffs are unlikely. The improvement in energy security and environmental quality under the Investment Program will benefit the poor more than the general population, as the poor are generally more vulnerable under adverse circumstances. The Investment Program will create a number of jobs in the energy efficiency service sector. In addition, it will reduce coal consumption, free up resources, and lower the risks associated with coal mining and transportation.
Indigenous Peoples Not applicable.
Stakeholder Communication, Participation, and Consultation
During Project Design Interviews and site visits have been held with a number of large electricity end-users and middle users (e.g. energy service companies and high efficiency equipment manufacturers) on the development of EPP. The NDRC, MOF, and several provincial government departments (Economic and Trade Commission, Development and Reform Commission, Finance Bureau, State Assets Supervision and Administration Commission, and Energy Conservation and Monitoring Center) have been consulted about the IP.
During Project Implementation Participatory workshops with stakeholders and key Guangdong government departments will be held during project implementation to obtain feedback for refinement of IP design and implementation.

Business Opportunities

Consulting Services Consulting services will be used to assist in (i) assessing EPP sub-project applications, (ii) implementing EPP sub-projects, (iii) carrying out independent measurement and verification of energy savings and demand reductions of implemented sub-projects, and (iv) seeking carbon revenues for EPP projects from CDM. Consultants were recruited according to ADB's Guidelines on the Use of Consultants.
Procurement All procurement to be financed will be carried out in accordance with ADB's Procurement Guidelines for loans to financial intermediaries. The sub-borrowers (both public and private sector companies) will undertake procurement of their respective packages in accordance with established commercial practices, acceptable to ADB. The IP is designed to result in economic efficiency because the sub-borrowers will only participate as EPP contributors when the payback period of the investment is shorter than the sub-loan repayment period (and the life of the equipment installed). The EPP PMO will closely supervise the implementation to ascertain that the agreed energy efficiency sub-project is implemented and estimated energy savings are realized.

Responsible Staff

Responsible ADB Officer Xinjian Liu
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
Government of Guangdong Province (GGP)
Mr. Li Shuyuan
li36376@yahoo.com.cn
Guangzhou, PR China

Timetable

Concept Clearance 28 Aug 2007
Fact Finding 03 Sep 2007 to 21 Sep 2007
MRM 16 Oct 2007
Approval -
Last Review Mission -
PDS Creation Date 16 Jan 2009
Last PDS Update 08 Dec 2011

LoanĀ 2426-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Jun 2008 29 Sep 2008 09 Jan 2009 31 Dec 2011 - 03 Feb 2012
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 35.00 09 Jun 2008 35.00 0.00 100%
Counterpart 15.00 Cumulative Disbursements
Cofinancing 0.00 09 Jun 2008 35.00 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - Satisfactory -

 
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