Project Name Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 3
Project Number 39653-043
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2773-PRC: Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 3
Ordinary capital resources US$ 42.94 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Energy - Energy efficiency and conservation - Energy sector development and institutional reform

Gender Equity and Mainstreaming No gender elements
Description The Project is to promote energy efficiency and environmental protection in Gungdong Province using advanced technologies, and is justified in technical, economic, and financial terms. The energy savings will result from retrofitting existing equipment with more efficient equipment, which in aggregate will reduce the need to construct and operate a conventional coal-fired power plant. The Project will consider only retrofits of proven energy efficiency technologies in the following areas: (i) motors and motor-drive systems; (ii) transformers and reactive power compensators; (iii) lighting; (iv) heating, ventilation, and air conditioning; (v) air compressors and pumping systems; (vi) recovery of waste energy from industry; (vii) coal-fired industrial boilers and industrial cogeneration; and (viii) other related energy efficiency improvement projects. The Project will have multiple benefits: (i) energy security improves as lesser new power supply capacity will be needed to meet future demand, and less coal will be used for power generation; and (ii) the local and subregional environment improves, and the contribution to global climate change is lower because of avoided coal use.
Project Rationale and Linkage to Country/Regional Strategy

Currently, PRC is one of the largest energy consumers in the world. Within its energy mix, approximately 70% of the primary energy demand is met by coal, and about 80% of electricity is generated from coal. The large share of coal-fired power generation results in serious environmental issues and accounts for about 50% of the PRC's SO2 emissions and 80% of NOx emissions. Rapid implementation of energy conservation measures, including implementation of EPPs, will lower the burden for later addressing the consequence of carbon emissions and climate change.

Guangdong has the largest and fastest-growing economy among all the PRC provinces. Its gross domestic product (GDP) has grown at 14% per annum since 1995. Electricity consumption is dominated by energy-intensive heavy industries, with the industry and manufacturing sectors combined representing about 73% of total electricity use. The province has relatively low natural resource endowments. It imports 100% of coal requirements and 80% of oil needs; approximately 20% of electricity is imported from other provinces. The demand for power has outpaced supply and power shortages have been experienced during the summer peak periods. About 75% of the generation capacity is from coal-fired power plants, which have caused serious air pollution. Therefore, improving energy efficiency is a high priority for GPG to help address both energy security and environmental issues. Guangdong also provides a good setting to pilot the EPP model because of its vibrant economy and the large impact that energy savings will have in comparison with less industrialized provinces.

Impact Improved overall energy intensity and reduced emissions in Guangdong province
Project Outcome
Description of Outcome The outcome will be an improvement in energy efficiency in industry and commercial sectors in Guangdong province
Progress Toward Outcome The Project became effective on 20 February 2012 and Loan Inception was conducted from 23 to 24 May 2012. By 10 Sep. 2013, the accumulated withdrawal under Tranche 3 reached $42.12 million, approximately 98% of the loan amount. Five of the six subborrowers under Tranche 3 have fully withdrawn their subloans.
Implementation Progress
Description of Project Outputs

Energy efficiency projects of Tranche 3 implemented

ESCO sector developed in Guangdong

Capacity developed for promotion and assessment of energy efficiency projects

Status of Implementation Progress (Outputs, Activities, and Issues)

To be assessed.

Not yet due.

Not yet due.

Geographical Location
Safeguard Categories
Environment FI
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Tranche 3 is classified as environmental category 'FI', in accordance with ADB's Safeguard Policy Statement (2009). The proposed subprojects are energy efficiency projects not located in any designed environmental protection zone, and will be constructed and operated in accordance with relevant national environmental laws and regulations according to the EA. The proposed subprojects, therefore, meet the environmental criteria for subproject selection in the schedule 5 of the FFA. Also, all proposed subprojects are screened against the Prohibited Investment Activity List stated in ADB's Safeguard Policy Statement (2009) and no subproject is found to fall into the list. The potential environmental impacts are limited to the disposal of the replaced electrical and mechanical equipment. Disposal will fully comply with related GPG's environmental regulations to minimize any potential impacts according to the EPP-PMO.
Involuntary Resettlement Tranche 3 is classified as category C' for involuntary resettlement and for indigenous peoples, as subprojects will not have any adverse social impacts on ethnic minorities. As all subprojects are either retrofit projects or located on the existing premises, Tranche 3 subprojects will not involve any land acquisition, demolition or resettlement of people.
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design During the project design, various stakeholders were consulted, such as Guangdong provincial finance bureau, Guangdong Development and Reform Commission, Guangdong Economic and Information Commission, Project Management Office, and Guangdong Finance and Trust Company.
During Project Implementation
Business Opportunities
Procurement The procurement mode for works, goods, and consulting services is consistent with the procurement threshold agreed in the FFA. Subborrowers will be required to follow the relevant procurement rules in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). Procurement must be from ADB member countries. Subborrowers will be encouraged to procure goods through competitive bidding or shopping when such procedures are applicable in the interest of economy and efficiency. In case of noncompliance, GFTC will exercise the right to recall the subloan.
Responsible ADB Officer Xinjian Liu
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
Guangdong Provincial Government (GPG)Guangdong Province, PRC
Timetable
Concept Clearance 31 Aug 2006
Fact Finding -
MRM 05 Mar 2008
Approval 05 Sep 2011
Last Review Mission -
PDS Creation Date 18 Apr 2008
Last PDS Update 16 Sep 2013

LoanĀ 2773-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Sep 2011 14 Nov 2011 20 Feb 2012 31 Dec 2013 - 12 Dec 2013
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 79.05 Cumulative Contract Awards
ADB 42.94 05 Sep 2011 0.00 0.00 0%
Counterpart 36.11 Cumulative Disbursements
Cofinancing 0.00 05 Sep 2011 42.94 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - -

This project data sheet was generated from http://www.adb.org/projects/39653-043/main on 05 September 2015