ADB is helping the People's Republic of China promote energy efficiency and environmental protection in Gungdong province. The third tranche of a multitranche financing facility will help fund projects to retrofit existing equipment with proven energy-efficiency technologies. The program is expected to result in energy savings and reduce coal consumption.
|Project Name||Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 3|
|Country||China, People's Republic of
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Governance and capacity development
|Sector / Subsector||
Energy / 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|
|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.|
|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.
|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.|
|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|
|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||Liu, Xinjian|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||PRC Resident Mission|
Guangdong Provincial Government
Guangdong Finance Department,
No. 26 Cangbian Road
Guangzhou, Guangdong Province, PRC
|Concept Clearance||31 Aug 2006|
|MRM||05 Mar 2008|
|Approval||05 Sep 2011|
|Last Review Mission||-|
|PDS Creation Date||18 Apr 2008|
|Last PDS Update||16 Sep 2013|
|Approval||Signing Date||Effectivity Date||Closing|
|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||42.94||0.00||100%|
|Cofinancing||0.00||05 Sep 2011||42.94||0.00||100%|
|Status of Covenants|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|Guangdong Energy Efficiency and Environment Improvement Investment Program - Tranche 3: Project Completion Report||Project/Program Completion Reports||Aug 2015|
|Loan Agreement for Guangdong Energy Efficiency and Environment Improvement Investment Program - Project 3 between People's Republic of China and Asian Development Bank||Loan Agreement (Ordinary Resources)||Dec 2011|
|Project Agreement for Guangdong Energy Efficiency and Environment Improvement Investment Program - Project 3 between Asian Development Bank and Guangdong Provincial Government||Project/Program Agreements||Dec 2011|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
|Title||Document Type||Document Date|
|People’s Republic of China: Guangdong Energy Efficiency and Environment Improvement Investment Program, Tranche 3 and Multitranche Financing Facility||Validations of Project Completion Reports||Aug 2016|
None currently available.
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People's Republic of China: Clean and Efficient Energy in Guandong ProvinceGuangdong province in the south of the People's Republic of China is proving to be a fertile testing ground for efficient and environmentally friendly power alternatives to fossil fuels.
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