Industrial Bank and IFC Collaborate to Expand Energy Efficiency Loans and Cut Greenhouse Gas Emissions in China: IFC to Support $210 Million Risk-sharing Coverage for Industrial Bank’s Energy Efficiency Loans
Industrial Bank, a pioneer in providing energy efficiency financing in China, and IFC, a member of the World Bank Group, today signed a cooperation agreement to deepen their collaboration in supporting energy saving and greenhouse gas emission reductions in China. This is the second phase of the IFC China Utility-based Energy Efficiency Finance Program.
Under the agreement, IFC will provide a $100 million risk-sharing facility to Industrial Bank that will help the bank extend 1.5 billion Chinese renminbi ($210 million) in energy efficiency loans. This initiative is expected to help reduce 5 million tons of carbon dioxide emissions a year, the equivalent of replacing ten 100-megawatt coal-fired power plants in China.
“As a major commercial bank in China, we attach great importance to corporate social responsibility. We are proud to offer a market-based financing model to help the country save energy and improve its environment,” said Industrial Bank’s President Li Renjie. “This is another step in our strategy of becoming the leading bank in environmental finance, building our business while serving the communities in which we operate. We greatly appreciate the strong partnership and cooperation IFC has established with us. Looking forward, we will increase our efforts in promoting the program, continue to introduce diversified service models, create customer value, as well as play a greater role in contributing to China’s growing need of promoting energy efficiency and greenhouse gas emissions reduction.”
While in Beijing to sign the agreement, which was also witnessed by officials from the China Banking Regulatory Commission, the Ministry of Finance, and the State Administration of Environment Protection, IFC Vice President for Financial Markets, Funds, and Africa Jyrki Koskelo said IFC’s facility for Industrial Bank demonstrates the strategic partnership that the two institutions have established. He added that Industrial Bank is at the forefront of banks in Asia that understand the attractive opportunity that climate change finance presents to achieve competitive advantage.
“President Li and his senior management team have a far-sighted view of the future of banking in China with a focus on prudent management, introduction of new products, and execution of strategy,” Koskelo said. “We expect to broaden our cooperation in a whole range of services that increase access to finance, improve services to families, and support small and medium enterprises.”
The two parties have made significant progress in their cooperation on the first phase of the program, which was launched in 2006. In that phase, IFC provided a risk-sharing facility of up to $25 million for Industrial Bank’s “green” loans. In turn, the bank has financed 46 energy efficiency and greenhouse gas emissions reduction projects, for a total loan amount of 900 million Chinese renminbi ($126 million). The majority of these loans are to small and medium enterprises that are implementing energy efficiency projects such as industrial boiler retrofitting, wasted heat recovery, co- and tri-generation projects for district heating, power saving, and optimization of industrial energy uses. Implementation of these projects are expected to reduce carbon dioxide emissions by more than 3.5 million tons a year, the equivalent of emissions from all 70,000 taxis currently running in Beijing for three years.
About Industrial Bank
Founded in 1988, Industrial Bank is a national joint stock bank in China and operates more than 400 offices in 41 branches and with over 10,000 employees. The bank is listed on Shanghai Stock Exchange (Stock Code: 601166) with total registered capital of RMB 5 billion. Total assets as of September 30, 2007 were RMB 857.615 billions, and relevant shareholders’ equity was RMB 36.996 billion. Industrial Bank realized net profit of RMB 6.024 billion during January and September of 2007. For more information, visit www.cib.com.cn.
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