China, People's Republic of: Shandong Green Development Fund Project
The Shandong Green Development Fund Project (SGDF) will pilot an innovative leveraging mechanism to catalyze private, institutional and commercial (PIC) capital for the development of climate positive infrastructure and business in Shandong Province, People's Republic of China (PRC). The project will support a portfolio of mitigation and adaptation subprojects assessed against both climate and financial eligibility criteria. The project will contribute to the province's transition to low-carbon and climate-resilient development patterns: Shandong faces mounting climate change (CC) and environmental protection challenges. The Province tops the country's energy consumption and the number of motor vehicles, responsible for most of the greenhouse gas emissions (GHG). The project aims to leverage private, institutional and commercial (PIC) finance for climate resilient subprojects assessed against both climate and financial eligibility criteria.
Leung, Kang Hang
East Asia Department
Request for information
China, People's Republic of
|Project Name||Shandong Green Development Fund Project|
|Country / Economy||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||Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
|Sector / Subsector||
Finance / Infrastructure finance and investment funds
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
The Shandong Green Development Fund Project (SGDF) will pilot an innovative leveraging mechanism to catalyze private, institutional and commercial (PIC) capital for the development of climate positive infrastructure and business in Shandong Province, People's Republic of China (PRC). The project will support a portfolio of mitigation and adaptation subprojects assessed against both climate and financial eligibility criteria. The project will contribute to the province's transition to low-carbon and climate-resilient development patterns: Shandong faces mounting climate change (CC) and environmental protection challenges. The Province tops the country's energy consumption and the number of motor vehicles, responsible for most of the greenhouse gas emissions (GHG). The project aims to leverage private, institutional and commercial (PIC) finance for climate resilient subprojects assessed against both climate and financial eligibility criteria. The project consists of a mix of public and private sector capital of $1.2 billion and catalytic resources of $300 million from international financing institutions (IFI), which is required to reach sufficient critical mass of funding to achieve a significant leverage ratio over 5. The project finances a portion of the total capital expenditures of selected climate resilient subprojects for a capped period to make the subprojects bankable, by addressing the upfront project risks, as well as promoting advanced technologies and an integrated approach for climate change. The level of catalytic fund and the financing terms are linked to the climate criteria and performance in line with the Green Climate Fund (GCF) investment criteria and framework.
The SDGF is expected to be effective in July 2020.
Additional financing from the Green Climate Fund is expected to be approved in 2020 Quarter 3.
|Project Rationale and Linkage to Country/Regional Strategy||
Policy Framework (National): Under the 13th Five Year Plan, PRC actively promotes a paradigm shift from gross domestic product (GDP)-oriented development to a development model centered on quality of growth. The Intended Nationally Determined Contribution (INDC) details the PRC's commitment to climate change actions by 2030, notably to: (i) achieve the peaking of carbon dioxide emissions around 2030; and (ii) increase the share of non-fossil fuels in primary energy consumption to around 20%.
Context (Regional): Shandong ranks the 8th in terms of provincial GDP per capita and the GDP of Jinan ranks 21 out of 34 PRC provincial capital cities. Shandong is a labor reservoir for migrants, partially a result of extensive industrial investment. However, the Province is facing multiple climate vulnerability challenges and investment is now targeted for industrial transformation and low carbon development that supports Climate Change (CC) adaptation and mitigation policies. Because of its history of rapid industrial development, the Province tops greenhouse gases (GHG) emissions and was selected to pilot for this Project. Shandong is required to reduce its CO2 emission intensity by 20.5% by 2020, the most stringent goal set at the provincial level. Shandong also targets to achieve peaking of CO2 emissions around 2027, three years earlier than the national goal. The Province faces many challenges in meeting these goals due to heavy reliance on coal and expanding traffic concerns; in 2017, Jinan was ranked as the most congested city in the PRC. In response, the State Council approved Shandong to become a comprehensive pilot area for shifting the growth paradigm with new drivers and investment. Meeting this paradigm shift and CC targets requires better access to climate specific finance, which the Project aims to support.
Priority Investments: Investment priorities are determined from the climate analysis and assessment of sectors, where financing mechanisms have most impact. For mitigation sectors the priorities are to address the main sources of GHG emissions (including but not limited to): (i) energy sector with renewable energy including wind, solar, biomass, geothermal and emerging technology investments; (ii) green (energy efficient) building and heating/cooling systems; and (iii) low carbon transport with supporting investments in new energy vehicles and bus rapid transit green corridors. Based on the Provincial modeling of climate vulnerabilities, Shandong's adaptation priorities are (including but not limited to): agricultural and urban water supply infrastructures; city flood resilience or sponge cities through low impact development that includes flood proofing and urban lifeline systems such as water supply, drainage; city greening, coastal protection and solid waste.
Challenges and Project Response: Over the last ten years, the Government with the support of the development partners built a strong policy and regulatory framework for CC. Given the very large investment identified, new mechanisms of financing climate-positive investments are required. Traditional sovereign financing and banking systems have little incentive to cater to CC investment needs that include longer term, flexible structuring and competitively pricing. A new approach is needed to unlock significant climate finance for cities, especially from Private, Institutional and Commercial (PIC) sources. The Project supports a long-term engagement in the PRC to finance a new generation of climate resilient infrastructure projects with higher risk profile that would otherwise rely on exclusively long-term sovereign funding or not proceed because of public funding gap.
ADB's country partnership strategy 2016-2020 facilitates the Government's reform agenda of "managing climate change and the environment." Investments under the Project also contributes to several Sustainable Development Goals (SDGs), namely SDG 9, "Industry, Innovation and Infrastructure" building climate resilient infrastructure and fostering new climate finance models innovation; and SDG 13, "Climate Action" taking urgent actions to promote climate related investments.
Peaking of carbon dioxide emission around 2030 or earlier on best efforts achieved.
|Description of Outcome||
Climate resilience in Shandong Province enhanced.
|Progress Toward Outcome||No issues.|
|Description of Project Outputs||
SGDF established with PIC financing leveraged
Knowledge and skills of local governments, civil society, and private sector to prepare climate-positive subprojects enhanced
|Status of Implementation Progress (Outputs, Activities, and Issues)||
SGDF I has completed fund registration on 9th Feb 2021, and has raised RMB 1.46 billion capital (on a total commitment basis), including RMB 0.68 billion IFIs (i.e., ADB KfW, and AFD, here after as "IFIs), RMB 0.35 billion from Qingdao municipal government (including Laoshan District) and RMB 0.41 billion PICs.
The structure of SGDF II is planned to be preliminary established in 2022, with amount of RMB 3.3 billion.
During the reporting period, SGDF inspected the gender equality of the first qualified enterprise and found out that the female employees accounted 27.5% of the total, much higher than the rate of the whole industry (4.92%). To protect the rights of female employees, the qualified enterprise provided them with a more detailed physical examination plan and work benefits which are more suitable for women. The investment from SGDF will provide more job opportunities for women in its Qingdao branch.
SGDF planned to invest 2 mitigation subprojects and at least 1 adaptation subproject. The subprojects will be assessed under the green criteria. The assessment reports will be prepared.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The environmental and social management system (ESMS) was first cleared in March 2020 and the revised ESMS was cleared in July 2020.|
|Involuntary Resettlement||SPCM compliance memorandum was signed on 3 September 2020.|
|Indigenous Peoples||SPCM compliance memorandum was signed on 3 September 2020.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||$10 million capacity development assistance as per the Project Administration Manual|
Follows ADB Procurement Framework for Financial Intermediation Loan
Green Procurement for the supply chain implemented on a voluntary basis by subprojects sponsors
|Responsible ADB Officer||Leung, Kang Hang|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||Public Mgt, Financial Sector and Regional Coop Division, EARD|
Shandong Provincial Finance Department
|Concept Clearance||03 Oct 2017|
|Fact Finding||30 Jul 2018 to 17 Aug 2018|
|MRM||09 Jul 2019|
|Approval||25 Sep 2019|
|Last Review Mission||-|
|Last PDS Update||28 Sep 2022|
|Approval||Signing Date||Effectivity Date||Closing|
|25 Sep 2019||17 Dec 2019||13 Apr 2020||30 Jun 2027||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||463.33||Cumulative Contract Awards|
|ADB||100.00||28 Sep 2022||0.00||0.00||0%|
|Cofinancing||0.00||28 Sep 2022||0.49||0.00||5%|
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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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|
|Shandong Green Development Fund Project: Environmental and Social Monitoring Report (July-December 2021)||Environmental and Social Monitoring Reports||Apr 2022|
|Shandong Green Development Fund Project: Environmental and Social Monitoring Report (13 April 2020-30 June 2021)||Environmental and Social Monitoring Reports||Sep 2021|
|Shandong Green Development Fund Project: Environmental and Social Management System Arrangement||Environment and Social Management System Arrangements||Jul 2020|
|Green Finance Catalyzing Facility: Environmental and Social Management System Arrangement||Environment and Social Management System Arrangements||Jun 2018|
|促进气候融资（山东）: 环境和社会管理体系安排（草稿）||Environment and Social Management System Arrangements||Jun 2018|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
ADB, GCF, and Partners Pioneer Climate Fund in Shandong, People's Republic of ChinaThe innovative Shandong Green Development Fund Project, cofinanced by ADB, KfW, AfD, and GCF, aims to leverage funding from institutional, commercial, and other sources from about $400 million in seed funding from the development partners.
ADB Secures GCF Funding for Innovative Climate Finance Fund in Shandong, PRCGCF today approved $100 million in funding for an ADB project in Shandong province in the PRC that will showcase new ways to mobilize private, institutional, and commercial financing for climate change mitigation and...
ADB-Supported Fund to Spur Private Climate Investments in Shandong, PRCADB has approved a €88.73 million ($100 million) loan to help establish the SGDF and attract private, institutional, and commercial financing for climate mitigation and adaptation projects in Shandong Province in the PRC.
|Tender Title||Type||Status||Posting Date||Deadline|
|Design, Review and Advisory (DRA)- Green Assessment||Firm - Consulting||Closed||03 Aug 2022||17 Aug 2022|
|Green Rating||Firm - Consulting||Closed||03 Aug 2022||17 Aug 2022|
|Monitoring, Evaluation, Report and Verification (MERV)||Firm - Consulting||Closed||09 Jul 2022||23 Jul 2022|
|Monitoring, Evaluation, and Verification and Framework||Firm - Consulting||Closed||28 Oct 2021||26 Nov 2021|
|Green Rating||Firm - Consulting||Closed||28 Oct 2021||26 Nov 2021|
|Carbon Emission Verification||Firm - Consulting||Closed||10 Jul 2021||08 Aug 2021|
|Green Assessment Consultant||Individual - Consulting||Closed||09 Jul 2021||15 Jul 2021|
No contracts awarded for this project were found
|Title||Document Type||Document Date|
|Shandong Green Development Fund Project: Procurement Plan||Procurement Plans||Jun 2019|