Finland Contributes $3 Million to IFC’s China Energy Efficiency Initiative
Helsinki, March 7, 2006 – Today, Finland’s Ministry of Trade and Industry signed an agreement to provide $3 million to the China Utility-Based Energy Efficiency Finance Program, managed by the International Finance Corporation. With support from this major contribution, the project is expected to have a significant environmental impact by reducing pollution and greenhouse gas (GHG) emissions. The project is also supported by a $16.5 million grant from the Global Environment Fund.
The goal of the program is to reduce GHG emissions in the delivery of energy services within China. It will support over $150 million in energy efficiency projects and equipment investments, which are expected to achieve GHG reductions of about 5 to 10 million tons of CO2 . Typical equipment includes gas boilers for industrial processing and building heating applications, heat distribution systems, co- and tri-generation systems, industrial heat recovery, heating and cooling systems, automation and control systems, efficient motors and pumps, capacitors, and frequency invertors. The program provides both technical assistance – such as engineering and marketing expertise – and project or equipment loans through local commercial banks.
“The China Utility-Based Energy Efficiency Finance Program provides a great opportunity to develop market-based solutions to address China’s significant environmental problems,” said Karin Finkelston, IFC’s associate director for East Asia and the Pacific. "In addition, by developing this technical assistance program in partnership with Finland, we hope to create a win-win situation where China benefits from Finnish expertise in energy efficiency technology and where Finnish companies develop greater access to the Chinese market.”
“Finnish companies offer a range of world-class energy equipment and engineering solutions in energy saving,” said Risto Paaermaa, Finland’s Ministry of Trade and Industry’s deputy director general of Industries and head of financing. “A program of services to develop the China energy equipment market, set aside exclusively for Finnish companies, will be developed and provided by Finpro; IFC’s China energy efficiency program will actively coordinate with Finpro to encourage partnerships and investments.”
The program will organize and provide marketing, engineering, project development, and equipment financing services to commercial, industrial, institutional, and multifamily residential sector energy users to support implementation of energy efficiency projects directly.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
IFC fulfills three functions related to the environment and social development. It manages environment and social risks associated with the projects it finances via environmental and social standards which its clients companies are required to apply. In collaboration with client companies, it looks at business opportunities arising from the protection of the environment and from social development. The IFC also explores and develops new financial products in order to create new business opportunities linked with the environment and social development.
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