fbpx 51186-001: Geothermal District Heating Project | Asian Development Bank

China, People's Republic of: Geothermal District Heating Project

Nonsovereign (Private) Project | 51186-001 Status: Approved

The project involves (i) a loan of up to US$200 million equivalent to Sinopec Green Energy Geothermal Development (SGE) to support the company's construction and operation of a series of geothermal-based district heating networks; (ii) a loan of up to US$50 million to Arctic Green Energy , a shareholder in SGE, to refinance certain existing debt which restricts AGE's ability to invest in SGE's expansion.

Project Details

Project Officer
Roberts, Scott C. Private Sector Operations Department Request for information
Country
  • China, People's Republic of
Sector
  • Energy
 
Project Name Geothermal District Heating Project
Project Number 51186-001
Borrower/Company Arctic Green Energy Corporation Private Limited
Sinopec Green Energy Geothermal Development Company Limited
Country China, People's Republic of
Location Nation-wide
Type or Modality of Assistance
3637 Loan Ordinary capital resources USD 50.00 million Approved
3638 Loan Ordinary capital resources USD 200.00 million Approved
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Energy / Energy utility services

Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Infrastructure Finance Division 2
Responsible ADB Officer Roberts, Scott C.
Project Sponsor(s) Sinopec Green Energy Geothermal Development Company Limited
Description The project involves (i) a loan of up to US$200 million equivalent to Sinopec Green Energy Geothermal Development (SGE) to support the company's construction and operation of a series of geothermal-based district heating networks; (ii) a loan of up to US$50 million to Arctic Green Energy , a shareholder in SGE, to refinance certain existing debt which restricts AGE's ability to invest in SGE's expansion.
Objectives and Scope The project will support the construction, acquisition, rehabilitation, and operation of a series of urban district heating systems based on geothermal energy. ADB will extend financing on a subproject-by-subproject basis, subject to defined environmental, social, development, and financial criteria. Subprojects will be identified during the project implementation stage. By facilitating the delivery of clean and reliable heating services, the project helps mitigate air pollution and climate change, which are key development challenges for the PRC.
Linkage to Country/Regional Strategy The project addresses three of the five strategic priorities of ADB's country partnership strategy for the PRC, 2016 2020: (i) managing climate change and the environment (in the area of environmental sustainability and pollution control), (ii) supporting inclusive economic growth (in the area of inclusive and green cities development), and (iii) private sector development. With over 70% of SGE's investment pipeline targeting the greater Beijing-Tianjin-Hebei region, the project complements ADB's sovereign initiatives to address the region's severe air pollution. Finally, the project in in line with ADB's Energy Policy and its Urban Operational Plan, 2012-2020.
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The project is classified as category B for environment. Potential environmental impacts are generally site-specific, reversible, and mostly associated with drilling and construction activities. Impacts during operations impacts may arise in subprojects that do not attain high rates of reinjection of geothermal tail-water. Anticipated environmental impacts will be avoided by implementing generally recognized good practices as well as preventive and control measures, including tail-water management policies. A value addition of the project will be the establishment of a corporate-level Environmental and Social Management System (ESMS), designed in consultation with ADB, that will operate in parallel with the company's existing site-level policies and procedures.
Involuntary Resettlement The project is categorized B for involuntary resettlement. Due diligence found no loss of shelter or residential land due to land acquisition on past subprojects, and none is expected on future subprojects. Temporary non-major economic displacement during well drilling and pipe laying, as well as permanent non-major economic displacement in case of heat central construction in rural villages, may arise. SGE will enhance its current land access and acquisition procedures, developed in accordance with national requirements, to enable compliance of future ADB-funded subprojects with SPS requirements.
Indigenous Peoples The project is categorized C for indigenous peoples, since no distinct and vulnerable ethnic minority communities were found present in SGE's existing sites. Ethnic minority screening procedures are anticipated to be developed in the ESMS to identify, mitigate, and manage any potential adverse or beneficial impacts of ADB-funded subprojects.
Stakeholder Communication, Participation, and Consultation Due diligence found that people affected by construction impacts are consulted in the environmental impact assessment and land acquisition processes as required by law. SGE will prepare a procedure for grievance resolution and ongoing consultation as part of the impact assessment action plan requirements for each subproject. End users' needs are captured in building designs, which the project will incorporate. The project ensures adequate participation of civil society organizations through the local governments master planning activity for the cities in which the heating system concessions will operate.
Timetable for assistance design, processing and implementation
Concept Clearance 09 Jun 2017
Credit Committee Meeting 14 Nov 2017
Approval 14 Dec 2017
Last PDS Update 12 Jun 2019

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
Geothermal District Heating Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Jun 2017

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.

Title Document Type Document Date
Geothermal District Heating Projects: Environmental and Social Compliance Audit Report Environment and Social Compliance Audit Reports Dec 2018

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


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