Beijing, March 25, 2013—
IFC, a member of the World Bank Group, and Bank of Nanjing have launched a 500 million yuan ($80 million) risk-sharing facility to support energy-efficiency and renewable-energy projects among small and medium enterprises.
The risk-sharing facility helps mitigate Bank of Nanjing’s credit risk when financing energy-efficiency improvement projects and renewable-energy projects by small and medium enterprises. IFC will also provide the bank with advice on setting up its green financing business.
"This agreement is testament to both our bank’s focus on environmental responsibility and an increasingly strong partnership with IFC" said Xia Ping, President of Bank of Nanjing. "We are promoting energy efficiency and emission reduction to help enterprises protect the environment. With this effort, we expect to provide unique green financing solutions."
The agreement comes under IFC’s China Utility-based Energy Efficiency Finance Program (CHUEE). In addition to providing risk-sharing facilities, the CHUEE program offers expert advice on assessing sustainable-energy projects to ensure that lending to climate-friendly projects is profitable for businesses.
CHUEE focuses on China’s small and medium enterprises, which use more than twice the amount of energy consumed by their larger industrial counterparts. These smaller enterprises traditionally face difficulties in getting finance to upgrade their facilities, as they often lack the required collateral for loans.
“By sharing risk and transferring knowledge, the program helps banks attract new clients and offer new products,” said IFC’s Vice President for Asia Pacific Karin Finkelston at the launch of the facility. “It allows small and medium companies to make investments that lead to greater productivity and efficiency, and gives government agencies new tools to scale up green finance.”
Nanjing is the capital of China’s Jiangsu province which holds some of China’s greatest potential for sustainable-energy financing among smaller businesses because of the sheer number of manufacturing enterprises operating there.
Since 2002, Bank of Nanjing has worked with IFC on corporate governance, credit risk management and banking for small and medium enterprises. With IFC’s support, Bank of Nanjing has increased its assets and improved business performance.
IFC established CHUEE in 2006. By the end of 2012, banks participating in the risk-sharing program had provided loans worth $783 million to 178 energy-efficiency and renewable-energy projects. They help reduce greenhouse-gas emissions by more than 19 million tons a year, roughly the equivalent of the annual emissions of nearly 40 medium-sized coal-fired power plants. The latest phase of the program, targeted at small and medium enterprises, is expected to help finance the energy-efficiency and renewable-energy projects of around 175 companies in China.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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