Supported by an IBRD loan of US$200 million and a GEF grant of US$13.5 million, the project aims to develop sustainable energy conservation lending businesses in the Export-Import Bank of China (EXIM), Huaxia Bank (Huaxia) and other domestic participating banks, through line of credit operation to support energy conservation investments in medium and large-sized industries, to improve their energy efficiency and reduce their impact on climate change.

Specifically the project will provide assistance to EXIM, Huaxia and other participating banks in developing their business plan for energy efficiency lending, staff training and capacity building, promotion and marketing, due diligence including financial, technical, social and environmental assessment.

The project plans to disseminate successful case studies of subprojects carried out by EXIM and Huaxia, as well as introduce energy conservation technologies and financing products through a series of national workshops.

Under the project, EXIM, Huaxia and other participating banks are expected to lend a total of US$600 million, using the World Bank loan and their own matching funds, to large and medium-sized industrial enterprises for energy conservation investment subprojects over five years. Assistance will be provided to support independent verification of energy conservation lending and to monitor energy savings performance of subprojects financed by the participating banks.

The project will also help strengthen the government capability in the implementation of national energy conservation policies and programs through assistance to the National Energy Conservation Center (NECC), and support a midterm review of the implementation of priority national energy conservation programs of the 11th Five-Year Plan to identify problems, offer recommendation and assist in implementing remedial measures.

(China Development Gateway May 28, 2008)