Opening remarks by Ashok Lavasa, ADB Vice President for Private Sector Operations and Public–Private Partnerships, at the Bank of Huzhou Signing Ceremony, 4 November 2022
Ladies and gentlemen,
Good afternoon and a warm welcome. I am pleased to join the ceremony for the signing of the Asian Development Bank’s (ADB’s) $50 million loan agreement with the Bank of Huzhou (BOH).
The long-term financing from ADB will support BOH to scale-up lending to micro, small and medium sized enterprises (MSMEs) for energy efficiency improvements which will help them to reduce their carbon footprint.
There is an ongoing paradigm shift in the People’s Republic of China (PRC) towards high-quality green development in line with the government’s goal to reach carbon neutrality before 2060. A tremendous amount of financing is needed to achieve this structural transformation and mobilizing private capital will be crucial for decarbonization of MSMEs.
It is estimated that over 50% of the CO2 emissions in the PRC are attributable to MSMEs. By leveraging climate actions, MSMEs can green supply chains, reduce costs, and increase preparedness to external shocks. Despite the recent progress of financial inclusion in the PRC, MSMEs still face limited access to finance and high financing costs. Being regional financial service providers, city commercial banks have an important role in increasing MSMEs’ access to climate finance.
ADB is very pleased to partner with BOH to support MSMEs’ decarbonization given the bank’s strong focus on green finance and inclusive finance. The project will provide much-needed long-term finance and include other features to support BOH’s capacity development in terms of environmental and social safeguards and gender mainstreaming.
ADB’s country partnership strategy 2021-2025 for PRC emphasizes reducing climate change vulnerabilities, promoting low-carbon development, and expediting access to finance for private companies, particularly MSMEs. I am pleased to see the current project being closely aligned with PRC’s development priorities and contributing to ADB’s ambition of delivering $100 billion of climate finance by 2030. This project reflects the close collaboration between ADB’s Private Sector Operations Department and the East Asia regional department and combines the transaction experiences and sector expertise of both departments. It sets an excellent example for ADB’s future operations in the PRC.
Ladies and gentlemen, thank you again for attending this ceremony to witness the signing of the loan agreement with Bank of Huzhou. Congratulations to Bank of Huzhou and our team at ADB.