(December 22, 2009, Sanming, Fujian ) Industrial Bank, China's first Equator Bank, held the Certificate-awarding Ceremony and Press Conference for the First Equator Principles Project in the China Banking Sector in Yong'an City to announce the formal launch of the 2×300MW expansion project of the Fujian Hua Dian Yong An Power Generation Co., Ltd, the first project to apply the Equator Principles. At the event the Fujian Hua Dian Yong An Power Generation Co., Ltd was also granted a plaque inscribed with the words “China's First Equator Principles Project”.
At a time when the Chinese government has officially incorporated specific carbon reduction targets into China's long-term economic plans and sustainable development has become a universally recognized concept across the nation, the Industrial Bank's move marks the transition of Chinese banks from the internal standardization of environmental and social risks management to the implementation of specific projects. This transition marks a further step forward by China on its path towards sustainable finance.
On October 31, 2008, the Industrial Bank committed itself to the Equator Principles, thus becoming China's first Equator Bank. It thus began a one-year period of transition to modify its systems and internal capabilities. During the one-year period of transition, as the first Equator Bank in China, the Industrial Bank proceeded to model its internal system in accordance with the Equator Principles. As a part of this initiative, it has developed an Equator Principles implementation system comprising a basic system, management methods, operational procedures as well as a series of operational tools. It also enhanced internal training, highlighted concepts and developed skills in practical operation. These initiatives created solid foundations for the implementation of the Equator Principles.
RMB 730 billion was issued for the first loan applying the Equator Principles. The loan is to support a 2×300MW expansion project of the Fujian Hua Dian Yong An Power Generation Co., Ltd. As one of the priority power source construction projects in Fujian province, this project adopts circulating fluidized bed boiler technologies for furnace desulfuration so as to reduce the emission of SO2 and nitrogen oxides. It is predicted that it will reduce over 1530 tons of smoke and dust and 12245 tons of CO2 annually upon completion, and will thus play a significant role in improving air quality, reducing acid rain as well as improving forest product quality.
Since it is the first Equator Principles Project, the Industrial Bank conducted strict performance assessment on the project in terms of environmental and social risks, and required the corporation to prepare a feasible action plan according to inherant environmental and social issues. This action plan consists of 17 action suggestions including social and environmental management system building, employee safety operation manual, production dust control including smut, dust and limestone dust from desulfuration system, assessment of the impact created by the project on the livelihood of the rural population whose land was requisitioned by the state, and assessment of the current situation of enterprises which were relocated and the current situation of original employees. Related suggestions are viewed as clauses in the loan contract, and the borrowing enterprise is required to fulfill these clauses in due time.
At the certificate-awarding ceremony, the Industrial Bank stated that although the adoption of the Equator Principles is the action of the bank, the implementation thereof not only improves bank's capability in the management of environmental and social risks, but also promotes the environmental and social performance of borrowing enterprises. During the year of transition, the Industrial Bank proved by means of research and study, forums, and practice that the essential responsibility of a bank is to build a relationship characterized by mutual-benefit and prosperity-sharing with society, the environment as well as other interest-related parties so as to create a sustainable mode of operation. The Equator Principles' aim of sustainable finance chimes with the Industrial Bank's sustainable development strategy. The Industrial Bank hopes that more and more banks and financial enterprises will embrace the Equator Principles so as to give full play to its key role in the global management of environmental and social risks.
Huang Biaobing, the General Manager of the Fujian Hua Dian Yong An Power Generation Co., Ltd said that despite only just coming into contact with the Equator Principles, they are quite impressed with the global tool. They never expected that there would be a bank which could put forward such specific and professional suggestions for enterprises, including advice on building a social and environmental management system, preparing professional safety manuals for each post in the enterprise, working out action plan for the enterprise and progressively adopting alleviation and monitoring measures on environmental and social risks. In the opinion of the enterprise, the Equator Principles not only play an important role in the project itself, but also have a significant influence on the operation, management as well as the sustainable development of the enterprise.
Leaders from the China Banking Regulatory Commission, Fujian Banking Regulatory Bureau, Sanming Municipal Government and Yong'an Municipal Government also attended the meeting, and gave their congratulations on the localization of the Equator Principles project and expressed gratitude for the efforts that the Industrial Bank has made for local enterprises in environmental and social risks management and the support of local sustainable development. Li Xiaowen, Vice director of the Statistics Department of the Banking Regulatory Commission, expressed his approval for IB's capability building and project operation in the transition year of the Equator Principles, and called for more banks and financial institutions to follow in the foot steps of the Industrial Bank to turn sustainable finance concepts into actual practice. He also said that the Banking Regulatory Commission would try its best to assist and guide banks and financial institutes to go further in sustainable development.
WWF also affirmed the efforts that the IB has made in green credit, and will continue to follow the sustainable development of the Industrial Bank. On December 3, WWF granted the Industrial Bank with the Outstanding Nature Conservancy Award for IB's efforts in propelling a sustainable banking and financial industry. It expects the Industrial Bank to play a more significant and aggressive role in the green economy in future.