China, People's Republic of: Hebei Energy Efficiency Improvement and Emission Reduction Project

Sovereign Project | 44012-013 Status: Active

Summary

ADB is helping the People’s Republic of China encourage energy efficiency investments in Hebei province, its second largest provincial energy consumer. The project will channel ADB loan proceeds through a commercial bank to targeted industries. It will also establish a revolving fund to finance several batches of energy efficiency investments.

Latest Project Documents

Consulting Notices See also: CMS

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Procurement Notices See also: Operational Procurement

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Procurement Documents


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Project Name Hebei Energy Efficiency Improvement and Emission Reduction Project
Project Number 44012-013
Country China, People's Republic of
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Loan 2835-PRC: Hebei Energy Efficiency Improvement and Emission Reduction Project
Ordinary capital resources US$ 100.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
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

The Project implementation is on track. To date, eight subloan/subproject agreements have been signed for a total of $100.0 million with $97.8 million disbursed. One subborrower (Julu Country Changsheng Textile Co., Ltd. has decided to cancel its subproject with subloan amount of $2.2 million and reallocate the same loan amount to another subborrower (Hebei Yufeng Enterprises) thereby increasing its subloan from $15.0 million to $17.0 million. The request was approved by ADB on 1 March 2013. Seven of the subprojects have completed the installation and completed commissioning.

A subproject, the China Resources Cangzhou Co-generation Co. Ltd, advised that it will reduce its withdrawals by $2.2 million (this amount was expected within 2014 but projected in 2015) and reallocate to other subprojects. The subloan agreement and payment schedules will be revised. The new subproject is being finalized by the PMO.

Additional grant financing of $ 3.65 million has been approved on 9 Oct 2013 and the Grant Agreement was signed on 17 Dec 2013 and the grant was declared effective on 21 Jan 2014. The project implementation consultants to provide management advisory for GEF grant project have been recruited and the imprest account advance of $365,000 was disbursed on 30 Sep 2014.

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

Subprojects are under implementation. Seven subprojects have completed commissioning. One subproject is expected to be completed by Sep 2015.

REF has been established.

Completed with total contract value of CNY141 million.

Not yet due. No commercial bank loan has been used by subborrowers under the project.

Consultants are expected to undertake dissemination of innovative energy efficiency technologies in iron and steel industry and identify host companies to demonstrate these technologies.

Selection of third party M&V agency has been completed. Procurement of M&V equipment and training activities are ongoing.

Ongoing. As of Jun 2015, 17 data substations had been monitored online, involving 1127 monitoring spots, with 1.1695 million kVA total capacity of transformers monitored, and 1.5 million kW of equipment monitored. 29 power users have signed the Cooperative Agreement on Construction of Data Substation and Provision of Service, another 9 power users to sign the agreement.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects

The project is categorized as financial intermediary category B for the environment in accordance with ADB's Safeguard Policy Statement (2009). The identified subprojects, under components 1 and 2, have been screened in accordance with ADB's environment screening procedures. All the identified subprojects except Hebei Qianjin Iron and Steel Group Co. Ltd. and Hebei Guangyuan Solar Energy Technology Co. Ltd. have been categorized as category B and the above mentioned two projects have been categorized as category C. All category B subprojects have been approved by Hebei Provincial Environment Protection Agency based on environmental impact assessment forms prepared by subborrowers as required under domestic requirements. Separate initial environmental examination (IEE) reports have been prepared for category B subprojects in accordance with ADB's SPS and summarized in the draft project IEE (PIEE).The PMO is responsible for ensuring the provisions of PIEE and especially the EMP is implemented by each subborrower during subproject construction and subsequent operation. The PMO has established the Environtment and Social Management System (ESMS) and annual enviorntment monitoring reports have been disclosed.

In addition, an environmental and social management system (ESMS) will be established and maintained as part of HPG's overall management system, in relation to the ADB loan project, in order to meet national laws and ADB environmental and social safeguard requirements for FIL as per ADB's SPS. The ESMS guidance document has been prepared. It guides the PMO as PMO takes on its responsibility of appraising and approving the future subprojects under the FIL. HPG and PMO has (i) agreed to adopt ESMS prior to loan effectiveness, including the funding and recruitment of a full time staff position for an environmental and social safeguards manager in the PMO to help ensure that the final ESMS be enforced throughout the 15-years tenure of this FIL; (ii) committed to enforce the PIEE including the EMP; and (iii) agreed to update the EMP as appropriate during the project implementation to include any new subprojects included in the future.

Environmental and social performance will be evaluated on an annual basis. The PMO will ensure that the subproject company prepares and submits an environmental and social safeguards monitoring report, including an update of the EMP, and will review and assess the subproject's performance on environmental and social safeguards issues. Outline for a subproject environmental and social safeguard monitoring report is provided in the ESMS.

Based on the review of the monitoring reports for environment category B projects prepared by the subproject companies, the safeguards manager will prepare an annual ESMS implementation report, and submit it to ADB.

Grievance redress mechanism is addressed through separate arrangement by PMO for the whole project by setting up a formal web-based platform to provide a systematic, transparent and timely process for receiving, evaluating and addressing affected peoples project-related complaints and grievances. The grievance redress mechanism will be open to all project affected people, regardless of the nature of their complaint and should be gender responsive, culturally appropriate, and readily accessible to all segments of the affected people at no costs and without retribution.

Involuntary Resettlement The project is categorized as financial intermediary category C for involuntary resettlement in accordance with ADB's Safeguard Policy Statement (2009). The subproject selection criteria explicitly exclude subprojects having (i) any land acquisition or housing demolition, and (ii) subprojects having adverse impacts on ethnic minorities. The PMO is required to ensure that this requirement is met during the screening of the subprojects to be identified as required in the ESMS. The identified subprojects do not have any social impacts related to ADB's involuntary resettlement and indigenous peoples policy requirements.
Indigenous Peoples The project is categorized as financial intermediary category C for indigenous peoples in accordance with ADB's Safeguard Policy Statement (2009). The subproject selection criteria explicitly exclude subprojects having (i) any land acquisition or housing demolition, and (ii) subprojects having adverse impacts on ethnic minorities. The PMO is required to ensure that this requirement is met during the screening of the subprojects to be identified as required in the ESMS. The identified subprojects do not have any social impacts related to ADB's involuntary resettlement and indigenous peoples policy requirements.
Stakeholder Communication, Participation, and Consultation
During Project Design

Consultation with central government agencies. The National Development and Reform Commission and the Ministry of Finance have been consulted to ensure the project is aligned with the government's development strategies and priorities.

Consultation with provincial government agencies. The HPG will be the executing agency for the project. Hebei Provincial Development and Reform Commission, Hebei Provincial Finance Department, and Hebei Provincial Department of Environmental Protection are the partners for the project, and have been participating in all steps for the project design and subproject selection. They are also the main constituent entities of the project management office. Hebei Power Demand Side Management and Instruction Center has been actively involved in the project preparation as the project management office.

Nongovernment and private organizations. Experts from industrial associations and research institutions have been invited to workshops or engaged as advisors for the project. Interviews and site visits were conducted with more than 20 large energy consuming enterprises, energy service companies, and high-efficiency equipment manufacturers.

Local communities. Consultations were conducted to gauge support for the project from local communities and employees who will be the direct beneficiary groups of the project.

During Project Implementation Stakeholders will be consulted and the report and information obtained during the course of the implementation will also be shared with them.

Business Opportunities

Consulting Services Based on the readiness of the initial subprojects, in the first batch of the FIL, there is no need for implementation consultants. If there is a need for consultants to undertake due diligence, for subsequent batches subprojects to be financed by REF, and prepare the operating guidelines for CGF for the third component, they will be recruited by the PMO using the counterpart funds. However, if there is a need during loan implementation to recruit consultants, using the loan proceeds, any recruitment would be undertaken in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time).
Procurement

Procurement will be done in accordance with ADB's Procurement Guidelines applicable to FILs, and adopt appropriate procedures, including (i) payment of reasonable prices, and (ii) fair canvassing when selecting suppliers. Procurement must be from ADB member countries. Subborrowers will be encouraged to procure goods through competitive bidding or shopping when such procedures are most appropriate in the interest of economy and efficiency. A procurement manual has been prepared to describe the special procurement method (FIL/national competitive bidding) that will be used for contract packages having a value less than $10 million. The procurement activities need to follow the approved procedure outlined in the procurement manual for the procurement activities undertaken under the special procurement arrangements provided for FIL. For contract packages not covered by the special procurement method (FIL/national competitive bidding), the standard procurement methods as described in ADB's Procurement Guidelines will apply. In cases of noncompliance, with procurement manual and ADB's Procurement Guidelines, the PMO and Huaxia Bank are required to refrain from financing the contract package.

The subborrowers are required to retain tendering agents approved by PMO and acceptable to ADB. The first contract package bided out for goods and works are subject to prior review by ADB and the bidding documents acceptable to ADB. The contract packages, in excess of $10 million, will be subject to international competitive bidding procedures and prior review by ADB. The subprojects, to be financed under component 2, is not required to follow the procurement manual as subborrowers (ESCO) are acting as the service providers to third parties.

Responsible Staff

Responsible ADB Officer Pradeep Perera
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Hebei Provincial Government
Hebei Provincial Finance Bureau
48 South Zhonghua St Shijiazhuang 050051
Hebei Province, People's Rep of China

Timetable

Concept Clearance -
Fact Finding -
MRM -
Approval -
Last Review Mission -
Last PDS Update 24 Sep 2015

Grant 0364-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Oct 2013 17 Dec 2013 21 Jan 2014 30 Jun 2017 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.00 Cumulative Contract Awards
ADB 0.00 09 Oct 2013 0.00 0.43 12%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 09 Oct 2013 0.00 0.37 10%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory - Satisfactory - -

Loan 2835-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Dec 2011 06 Mar 2012 20 Jun 2012 30 Jun 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 179.60 Cumulative Contract Awards
ADB 100.00 14 Dec 2011 0.00 0.00 0%
Counterpart 79.60 Cumulative Disbursements
Cofinancing 0.00 14 Dec 2011 100.00 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory - Satisfactory - -

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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