Water is an important resource for the existence and development of human beings. As a country confronting the shortage of water resource per capita, China has witnessed deteriorating pollution of water resource in recent years. In order to intensify the protection and reasonable development of water resource and achieve the sustainability of water resource, in 2012, the state issued, in succession, a range of policies and plans for intensifying the utilization and protection of water resources in China, including the Opinions of the State Council on the Implementation of the Strictest Regulations on the Management of Water Resources, the 12th Five-Year Plan for the Nationwide Treatment of Urban Sewage and Construction of Reclamation and Use Facilities,the Opinions of the General Office of the State Council on Accelerating the Development of the Seawater Desalination Industry, and the Plan on Water Pollution Prevention and Control in Key River Basins (2011-2015).
Based on estimation, during the “12th Five-year Plan” period, the total investment in the utilization and protection of water resources will exceed RMB 1700 billion. In confrontation with the increasingly severe water resource environment, as the first Chinese Equator bank, Industrial Bank (IB) has taken the protection and utilization of water resource in China as an important area of green finance in this year and kept increasing investment in the utilization and protection of water resource. As learnt by the reporter, by the end of June 2013, the financing granted by IB to the utilization and protection of water resource accumulatively has reached RMB 55 billion, accounting for nearly 20% in the bank's total financing volume based on green finance, with a financing balance reaching RMB 38.64 billion. Such financing supports more than 390 projects covering a number of fields such as industrial water conservation, seawater desalination, construction, upgrading and transformation of sewage plants, sewage pipe network engineering, sludge disposal engineering, water area control, comprehensive control of water environment, regenerated water, and prevention and control of heavy metal pollution. It is estimated that these projects could reduce the emission of 901,200 tons of chemical oxygen demand (COD) and save 255.7906 million tons of water.
As introduced by IB, it mainly supports the utilization and protection of water resource with many financing methods including fixed asset loan, project loan, working capital loan, financing lease, and consignment loan. Meanwhile, the bank has also developed characteristic products including emission right pledge-based financing, facilitating the emission reduction of COD. For instance, in Shuangliu County of Sichuan Province, IB provided the financing loans of RMB 2 billion to support the construction of the comprehensive control project for of local water environment; in Hefei of Anhui Province, it granted loans of RMB 1.6 billion to support the riverway regulation; in Wujin County of Jiangsu Province, it provided credit funds of RMB 150 million for the transformation project of rainwater and sewage pipe networks of an industrial park to support the construction of projects including sewage pipeline, sewage pumping station and rainwater pipeline.
Apart from the conventional green financing businesses for the utilization and protection of water resource, IB has, based on sustained innovation in recent years, taken the lead in releasing the emission right trading solutions, assisting governmental agencies at all provinces and municipalities (in particular, 11 state-level paid emission right trading pilots) to design trading platform and mechanism, develop emission right trading system, and provide a range of integrated solutions for trade clearing, settlement, capital management and support financing. Up to now, relevant cooperation has been launched in a number of provinces including Hunan, Hebei, Shanxi, Jiangsu and Zhejiang.
As indicated by the bank, IB has researched and worked out more detailed comprehensive solutions in utilization and protection of water resources, planning to release comprehensive service programs integrating characteristic products (model), including contract environmental service based financing and franchise and business right pledged financing, through basic product combination and innovation, so as to provide integrated solutions for the development and protection of water resources, water conservation, and construction and operation comprehensive facilities. In the future, the bank will no doubt invest more in the fields of utilization and protection of water resources.