China, People's Republic of : Shandong Green Development Fund Project (Additional Financing)
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 (Additional Financing)|
|Country / Economy||China, People's Republic of
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Operational Priorities||OP1: Addressing remaining poverty and reducing inequalities
OP2: Accelerating progress in gender equality
OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
OP6: Strengthening governance and institutional capacity
OP7: Fostering regional cooperation and integration
|Sector / Subsector||
Finance / Infrastructure finance and investment funds
|Gender||Effective gender mainstreaming|
|Description||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.|
|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.
ADBs 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||Compliant in reporting.|
|Involuntary Resettlement||Compliant in reporting.|
|Indigenous Peoples||Compliant in reporting.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
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||11 Feb 2020|
|Fact Finding||11 Feb 2020 to 11 Feb 2020|
|MRM||07 Sep 2020|
|Approval||29 Oct 2020|
|Last Review Mission||-|
|Last PDS Update||05 Sep 2022|
|Approval||Signing Date||Effectivity Date||Closing|
|29 Oct 2020||30 Mar 2022||18 Jul 2022||30 Jun 2027||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||100.00||Cumulative Contract Awards|
|ADB||0.00||05 Sep 2022||0.00||0.00||0%|
|Cofinancing||100.00||05 Sep 2022||0.00||0.00||0%|
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.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Amendment to the Loan Agreement for Loan 8385-PRC: Shandong Green Development Fund Project (Additional Financing)||Loan Agreement (Ordinary Resources)||Aug 2022|
|Project Agreement (ADB Green Climate Fund) for Loan 8385-PRC: Shandong Green Development Fund Project (Additional Financing)||Project/Program Agreements||Mar 2022|
|Loan Agreement (ADB Green Climate Fund) for Loan 8385-PRC: Shandong Green Development Fund Project (Additional Financing)||Loan Agreement (Ordinary Resources)||Mar 2022|
|Shandong Green Development Fund Project: Gender Action Plan||Gender Action Plans||Oct 2020|
|Shandong Green Development Fund Project: Project Administration Manual||Project/Program Administration Manual||Oct 2020|
|Shandong Green Development Fund Project: Additional Financing Report||Additional Financing (Cofinancing)||Oct 2020|
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
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.
None currently available.