Energy / Energy efficiency and conservation

In its long-term strategic framework 2008?2020 (Strategy 2020) , ADB has identified energy as a core operational sector and achieving environmental sustainability as a priority. ADB has introduced new initiatives (e.g. CEFPF) to augment its assistance to developing member countries for acquiring low-carbon technologies and implementing energy efficiency projects. ADB?s country partnership strategy for the PRC has also emphasized balanced and sustainable growth with more efficient uses of resources and more stringent protection of the environment. One of the key priorities of the 11th Five Year Plan (FYP) of the PRC is to improve energy efficiency by 20%, which is a flagship program of the PRC to address climate change and environmental challenges due to rapid economic growth. The TA has a close fit with both ADB's and PRC's priorities.

During the 2008 year end CPM, the PRC delegation requested ADB to provide this technical assistance (TA) for Yunnan Province to support its low carbon economy development. A reconnaissance mission (the Mission) from ADB visited Kunming, Yunnan Province during 4-8 May 2009 to discuss with the provincial officials from the Department of Finance of Yunnan Province (DFYP) and Yunnan Provincial Environmental Protection Department (YEPD) on the proposed TA. To match with TA resouces, both sides agreed to conduct the TA activities first in Kunming, capital city of Yunnan Province, which has about 28.2% of the provincial GDP and 30.2% of the provincial industrial production. Lessons learned in Kunming can be replicated to other cities in Yunnan. In 2006, five energy intensive industries consumed about 8.1 million TCE and accounted for about 85% of total energy consumption in Kunming. The Five Energy-intensive Industries are (i) iron and steel, consuming about 3.09 million TCE and accounting for about 33.7% of total energy consumption in Kunming; (ii) power generation, about 1.61 million TCE and 17.6%; (iii) chemical, about 1.49 million TCE and 12.3%; (iv) building material, about 1.04 million TCE and 11.4%; and (v) non-ferrous metal, 0.87 million TCE and 9.5% . The Mission and the provincial government agencies agreed to focus on these five energy-intensive industries, and reached a common understanding on the impact, outcome, scope of work, key activities and implementation arrangements of the TA.