China, People's Republic of : Shaanxi Accelerated Energy Efficiency and Environment Improvement Financing Project
The project consists of a clean energy financing platform (CEFP) to channel finance to clean energy investments in Shaanxi Province. In addition, to support the high-impact energy efficiency and emission reduction initiatives in large enterprises, the platform focuses on directing investments to small and medium-sized enterprises (SME).
Project Details
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Project Officer
Gerilla-Teknomo, Gloria P.
East Asia Department
Request for information -
Country/Economy
China, People's Republic of -
Modality
-
Sector
- Energy
| Project Name | Shaanxi Accelerated Energy Efficiency and Environment Improvement Financing Project | ||||
| Project Number | 48452-004 | ||||
| Country / Economy | China, People's Republic of |
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| Project Status | Closed | ||||
| Project Type / Modality of Assistance | Loan |
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| Source of Funding / Amount |
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| Strategic Agendas | Environmentally sustainable growth Inclusive economic growth |
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| Drivers of Change | Knowledge solutions Partnerships Private sector development |
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| Sector / Subsector | Energy / Energy efficiency and conservation |
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| Gender | No gender elements | ||||
| Description | The project consists of a clean energy financing platform (CEFP) to channel finance to clean energy investments in Shaanxi Province. In addition, to support the high-impact energy efficiency and emission reduction initiatives in large enterprises, the platform focuses on directing investments to small and medium-sized enterprises (SME). The CEFP offers three complementary financial products: (i) debt financing facility to provide entrusted loans,_(ii) credit guarantee facility to leverage cofinancing, and (iii) lease financing facility for the purchase of energy efficient industrial equipment. The CEFP partners with two commercial banks active in Shaanxi Province to offer entrusted loans, and the partner banks are encouraged to provide cofinancing to match at least the ADB loan proceeds. The guarantee facility provides credit guarantees to technically sound subprojects with high energy-saving potential but lacking in collateral to meet the requirements of the commercial banks for the provision of cofinancing. This facility is particularly useful for ESCO and SME borrowers. The CEFP provides credit enhancement to the guarantees provided by Shaanxi SME Financing Guarantee Company_by making a cash deposit of not more than 20% of the guaranteed cofinancing loan amount in the beneficiary bank of the guarantee. This ensures that the guarantee facility provides a minimum leveraging ratio of 5. |
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| Project Rationale and Linkage to Country/Regional Strategy | National plan for energy savings and emission reduction. The PRC is the largest energy consumer in the world. In 2014, it accounted for 21% of global energy consumption. The highly energy-intensive and coal-dominated economic structure has taken a heavy toll on the PRC's natural environment and has become the major cause for the country's high levels of greenhouse gas emissions and air and water pollution. To tackle this problem, the Government of the PRC has made promoting environmentally sustainable growth a key priority. The PRC's Thirteenth Five-Year Plan, 2016-2020, contains specific measures and targets to decouple economic growth from energy consumption and carbon emissions, boost the share of nonfossil energy in primary energy consumption, and reduce the release of major air pollutants._These targets will contribute to the PRC's nationally determined commitment to reducing the carbon intensity by 60%-65% by 2030, compared with 2005, and achieve carbon peaking during 2027-2030. The national energy-saving targets were disaggregated and allocated to the provinces. The government is providing additional incentives to western provinces that are heavily dependent on coal and energy-intensive industries to reduce energy intensity. Energy savings and emission reduction in Shaanxi Province. Shaanxi Province, located in the western part of the PRC, is a major producer of coal, oil, and natural gas, and its industrial structure heavily relies on these fossil fuels as feedstock and as an energy source. Although the province reduced its energy intensity by 16.3% during the Twelfth Five-Year Plan, 2011-2015, and industrial energy intensity by 18.6%, this was achieved by mainly targeting large enterprises. Shaanxi Province aims to reduce energy intensity by an additional 15% by 2020, compared with 2015. It has significant untapped opportunities to reduce the energy intensity and air pollution caused by SMEs because these were not targeted under the Twelfth Five-Year Plan. |
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| Impact | Energy intensity and emission in Shaanxi Province reduced |
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| Project Outcome | |
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| Description of Outcome | Financing barriers to clean energy investments in Shaanxi Province are reduced. |
| Progress Toward Outcome | As of December 2021, the nine approved subprojects generated an energy saving of 182,655.94 tce, and reduced emissions of (i) 505,958.16 tons of carbon dioxide, (ii) 1,263.25 tons of sulfur dioxide, (iii) 306.17 tons of particulate matter, 1,475.48 tons of nitrogen oxide, and (iv) 529.31 tons of carbon monoxide. ADB approved 9 subprojects with 99% disbursements as of Dec 2021. |
| Implementation Progress | |
| Description of Project Outputs | CEFP for financing energy-saving and emission-reduction subprojects in Shaanxi Province is established. Demonstrative energy-saving and emission-reduction subprojects financed by CEFP are implemented. |
| Status of Implementation Progress (Outputs, Activities, and Issues) | Output 1: Nine subprojects have been approved with 99% of the ADB loan disbursed. The project has, so far, supported subprojects on geothermal and heat pump for heating; LED street lighting; distributed energy stations to supply heat, water, and cooling; and purchase and installation of safe, green, energy-saving construction materials, equipment and other ancillary supporting projects.Four of the approved subprojects have partially utilized the reflow fund of about CNY201.85 million. These subprojects include: (i) A05: Comprehensive Energy Project of Western China Science and Technology Innovation Harbor Wisdom Uni-Town, (ii) A07: Heating Project of Nancyang Dongyuan, Affiliated Residence of Science and Education Section of Science and Technology Innovation Port in Western China, (iii) A08: Non-Interfering Geothermal Heating for District B of Fengbin Shuizhen, and (iv) A09: High Tech Tiangu Yashe (South Plot) Building Comprehensive Energy Efficiency and Environment Improvement Subproject.Seven SMEs with external cofinancing estimated at $83 million, which was achieved without support from the guarantee facility. SMEs have enough cash collateral without the need of the guarantee facility.Output 2: The energy savings of the first six approved subprojects is estimated at 182,655.94 tce. The data for the last three subprojects are not yet available as of this reporting period. Except for two subprojects LED projects (Subloans A02 and A03), the seven SME subprojects achieved a combined total of energy savings of 162,551.9 tons of coal equivalent. |
| Geographical Location | Xi'an |
| Safeguard Categories | |
|---|---|
| Environment | FI |
| Involuntary Resettlement | FI |
| Indigenous Peoples | FI |
| Summary of Environmental and Social Aspects | |
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| Environmental Aspects | The project is classified as financial intermediation loan. An ESMS is established to meet national laws and ADB's environmental and social safeguard requirements for FIL as per the Safeguard Policy Statement._The ESMS provides guidance on (i) screening, categorization, and review of subprojects; (ii) organizational structure and staffing, including skills and competencies in environmental and social areas; (iii) capacity building; and (iv) monitoring and reporting. As per the ESMS requirements, the executing agency has entered into a long-term contract with an experienced environment consultancy firm. The ESMS provides for environment category A subprojects to be included. If such subprojects are proposed by the IA, ADB will review the environmental impact assessments and approve them provided they meet ADB Safeguard Policy Statement requirements, including disclosure and consultation. The existing industrial facilities where subprojects are located will be subject to an environmental audit, and recommendations will be made to ensure that these facilities meet acceptable standards. |
| Involuntary Resettlement | The project is classified as financial intermediary. The subproject selection criteria exclude subprojects that (i) require new land acquisition, (ii) result in labor retrenchment or labor redundancies, or (iii) have adverse impacts on ethnic minority communities. |
| Indigenous Peoples | The project is classified as financial intermediary. The subproject selection criteria exclude subprojects that (i) require new land acquisition, (ii) result in labor retrenchment or labor redundancies, or (iii) have adverse impacts on ethnic minority communities. |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | |
| During Project Implementation | ADB is closely working with the PMO in the appraisal and screening of potential subprojects. The midterm review mission was conducted in Shaanxi province on 3-5 December 2019. Regular review missions throughout the implementation period will be undertaken to assess the project's progress and provide support/assistance, when necessary. |
| Business Opportunities | |
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| Consulting Services | Recruitment of individual consultants for 40 person-months has not started. |
| Procurement | The subborrowers will use commercial practices acceptable to ADB for procurement of goods and services using the proceeds of subloans. A procurement manual was prepared to provide guidance on how the commercial practices can be adopted in a manner consistent with ADB's procurement principles. |
| Responsible ADB Officer | Gerilla-Teknomo, Gloria P. |
| Responsible ADB Department | East Asia Department |
| Responsible ADB Division | EASI |
| Executing Agencies |
Shaanxi Financial Holding Group |
| Timetable | |
|---|---|
| Concept Clearance | 22 Oct 2015 |
| Fact Finding | 01 Aug 2016 to 09 Aug 2016 |
| MRM | 30 Aug 2016 |
| Approval | 28 Nov 2016 |
| Last Review Mission | - |
| Last PDS Update | 29 Apr 2022 |
Loan 3475-PRC
| Milestones | |||||
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| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 28 Nov 2016 | 29 Mar 2017 | 13 Jun 2017 | 30 Jun 2022 | - | 30 Jun 2022 |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 317.60 | Cumulative Contract Awards | |||
| ADB | 150.00 | 13 Sep 2022 | 0.00 | 0.00 | 0% |
| Counterpart | 167.60 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 13 Sep 2022 | 0.00 | 0.00 | 0% |
| Status of Covenants | ||||||
|---|---|---|---|---|---|---|
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
| Rating | - | Satisfactory | Satisfactory | Satisfactory | Satisfactory | Unsatisfactory |
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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.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
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ADB Backing Finance Platform for Clean Energy Investments in Shaanxi
ADB has approved a loan of $150 million to establish a clean energy financing platform to channel funds to clean energy investments in Shaanxi Province.
Tenders
Contracts Awarded
Procurement Plan
None currently available.