During the “12th Five-year Planning” period, Industrial Bank (IB) will arrange a financing scale of not less than RMB 30 billion to support the projects in the field of energy conservation and emission reduction across Sichuan, and will work together with Sichuan United Environment Exchange to explore low-carbon economic transformation and build the Southwest China Emission Right Trading Market – learnt by the reporter at the “Beautiful China Tour • Beautiful Bashu – Sichuan Government-Banking-Enterprise Conference on Green Finance” held in Chengdu on September 29.
The conference was sponsored by Industrial Bank in collaboration with the Development and Reform Commission of Sichuan Province and attended by representatives from the Development and Reform Commission, the Provincial Commission of Economy and Information Technology, the Environmental Protection Department of Sichuan, and key enterprises of the province in the area of energy conservation and emission reduction, as well as the Environment Finance Department of IB Head Office and IB Chengdu Branch.
At the conference, IB Chengdu Branch entered into a strategic cooperation agreement with the Development and Reform Commission of Sichuan Province and Sichuan United Environment Exchange respectively. Under the above agreements, IB will provide financial services, including financing and information consulting, for energy conservation and emission reduction of the province, and will carry out all-round cooperation in the following aspects: thematic research of pilot sites for emission right trading in Southwest China, energy performance contracting (EPC) business, building of emission right trading platform, emission right related financial services, resource related trading business, and wealth management service, with a view to pushing forward the low-carbon economy development of the province through making innovation in green finance and providing trading services.
As learnt by the reporter, in order to realize the long-run and normalized development of energy conservation and emission reduction, Sichuan Provincial Government approved the “2013 Implementation Plan for Key Reforms of Sichuan Province” in this July, which covered the following contents: to push emission right trading, to explore and build the system of credit rating framework indexes for corporate environment behaviors, to improve the evaluation system for environmental risks of green credit, and to establish an information sharing mechanism for environmental protection and finance departments.
According to the “Comprehensive Working Program for Energy Conservation and Emission Reduction in the ‘12th Five-Year Planning' Period” issued by the State Council, all financial institutions are encouraged to increase their financial support to energy conservation and emission reduction. Nonetheless, many entities in the energy conservation and emission reduction industry, like energy-saving service suppliers, are usually asset-light enterprises, which lack the guarantees in the common sense, so it is hard for them to match the risk appetites of conventional credit products of banks which lay stress on assets-based guarantee. As a result, they fall into the financing predicament for a time. As the first “Equator Bank” in China, IB, considering the characteristics of financing demands of enterprises in the area of energy conservation and emission reduction, has gradually formed a multi-layered, all-sided system of green finance products and services covering credit products, service models and financial solutions, thus effectively meeting the individualized financing demands of enterprises the area. For instance, the loan by using the future usufruct as the pledge for the financing of EPC projects, purchaser credit for the promotion of new energy automobile, and order financing for the promotion of LED green lighting.
Zhang Hua, Board Chairman and General Manager of Sichuan ESSIS Energy Investment Co., Ltd., told the reporter that it has undertaken several energy-saving and emission-reducing projects this year, and through the “EMC financing model” of IB, it has receiving a financing loan from the Bank by pledging the future usufruct, which filled about 80% of its fund gap. “In the past, it was almost impossible to receive such financing from a bank if an energy company has no sufficient guaranties.”
By the end of this August, IB Chengdu Branch has accumulatively provided financing of RMB 7.5 billion to the field of energy conservation and emission reduction across the province, with a financing balance hitting RMB 5.339 billion. Its green finance has covered three major fields: low-carbon economy, recycling economy and ecological economy, involving a variety of projects such as improvement of energy efficiency, development and utilization of new energy and renewable energy, and recycling of solid wastes, as well as national key energy conservation projects.