China, People's Republic of: SMALL HYDROPOWER DEVELOPMENT PROJECT

Nonsovereign Project | 41935-014

Summary

SMALL HYDROPOWER DEVELOPMENT PROJECT

The Project supports Sanchuan's expansion and capital expenditure plan to build, rehabilitate, expand, upgrade, privatize, and/or operate small-scale hydropower plants (HPPs), most of which are in the relatively underdeveloped central and western regions of the PRC. Proceeds from ADB financing will be applied by Sanchuan for the financing of its portfolio hydropower plants.

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Project Name SMALL HYDROPOWER DEVELOPMENT PROJECT
Project Number 41935-014
Borrower/Company SANCHUAN CLEAN ENERGY DEVELOPMENT CO. LTD.
Country China, People's Republic of
Location Yunnan Province, PRC
Approval Number 7291/51, 7291, 7291/2505
Type or Modality of Assistance
7291 Equity USD 25.00 million Committed
7291/2505 Loan USD 58.57 million Committed
7291/51 Complementary Financing Scheme USD 120.00 million Approved
Strategic Agendas
Drivers of Change
Sector / Subsector Energy - Renewable energy generation - small hydro
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Infrastructure Finance Division 2
Responsible ADB Officer Xiaowen (Sherwin) Pu
Project Sponsor(s)
Description

SMALL HYDROPOWER DEVELOPMENT PROJECT

The Project supports Sanchuan's expansion and capital expenditure plan to build, rehabilitate, expand, upgrade, privatize, and/or operate small-scale hydropower plants (HPPs), most of which are in the relatively underdeveloped central and western regions of the PRC. Proceeds from ADB financing will be applied by Sanchuan for the financing of its portfolio hydropower plants.

Objectives and Scope The Project serves as an important catalyst for the overall economic growth and environmental improvement in the PRC, particularly in the underdeveloped rural areas and central and western regions. Specifically, the Project is expected to (i) increase electricity supply through clean energy production to improve the country's energy-mix, strengthen rural electrification, and avoid air pollution from alternative coal fired power plants, (ii) transfer proven technology and successful experience of private sector from the relatively developed coastal region to the relatively underdeveloped central and western regions for the development of small hydropower resources in a sustainable manner, and (iii) catalyze commercial equity investment and long-term international/local bank financing for small-scale hydropower plants.
Linkage to Country/Regional Strategy

The Project is in line with ADB s country strategy for PRC which is based on five development objectives which include promoting equitable and inclusive growth, improving the environment, and private sector development and operations. In the PRC, ADB is enhancing its focus on achieving a better development balance between rural and urban areas and between coastal and inland regions.

ADB s private sector operations in the PRC have focused on infrastructure and energy sectors and environmental improvements, among others. In the infrastructure and energy sectors, ADB prioritizes pioneering projects with innovative contractual and financial structuring to encourage private sector participation, enhance management expertise and improve corporate governance. As agreed with the Government, ADB private sector operations will identify and support viable projects that are located in less-developed central and western regions.

Status of Development Objectives Majority of Sanchuan s HPPs are located in rural areas in the central and western regions in the PRC. Project activities during construction and operation provides job and other benefits to local communities. Further the acquisition and completion of partly completed small HPPs, such as the Mengnong River Plants in Yunnan province, transformed idle assets into productive and profitable operations.
Safeguard Categories
Environment FI
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The Project is classified as FI and will adopt an environmental management system following ADB s Environment Policy (2002). An environmental assessment process including implementation of an environmental management plan will be followed for the subprojects complying with both national and ADB safeguards requirements.
Involuntary Resettlement Due diligence was conducted on the social safeguard aspects of Sanchuan's operations. While some of the portfolio small HPPs entailed significant involuntary resettlement impacts, none of them affected any ethnic minorities. ADB's direct loan may finance future expansions and acquisition of new small HPPs that may involve land acquisition and resettlement and affect ethnic minorities in Yunnan Province. In the event that the portfolio HPPs have impacts on ethnic minorities and involve involuntary resettlement, resettlement plans and/or ethnic minority development plans will be prepared and implemented following the agreed Social Safeguards Framework and in accordance with ADB s social safeguard policy requirements. Assistance is also being extended to Sanchuan to establish an environment and social unit to implement and manage the environment and social aspects of its investment program.
Indigenous Peoples Due diligence was conducted on the social safeguard aspects of Sanchuan's operations. While some of the portfolio small HPPs entailed significant involuntary resettlement impacts, none of them affected any ethnic minorities. ADB's direct loan may finance future expansions and acquisition of new small HPPs that may involve land acquisition and resettlement and affect ethnic minorities in Yunnan Province. In the event that the portfolio HPPs have impacts on ethnic minorities and involve involuntary resettlement, resettlement plans and/or ethnic minority development plans will be prepared and implemented following the agreed Social Safeguards Framework and in accordance with ADB s social safeguard policy requirements. Assistance is also being extended to Sanchuan to establish an environment and social unit to implement and manage the environment and social aspects of its investment program.
Stakeholder Communication, Participation, and Consultation For specific investment components to be funded under the direct loan, consultation and participation activities will be undertaken following the guidance set forth in the Social Safeguards Framework.
Timetable for assistance design, processing and implementation
Concept Clearance 03 Aug 2007
Due Diligence 18 Dec 2007
Credit Committee Meeting 17 Sep 2008
Approval 13 Jan 2009
PDS Creation Date 21 Nov 2007
Last PDS Update 26 Sep 2014
Title Document Type Document Date
Small Hydropower Development Project Reports and Recommendations of the President Dec 2008
Proposed Equity Investment and Loan: Small Hydropower Development Project Initial Poverty and Social Analysis Aug 2008

Evaluation Documents

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