Shanghai, April 20, 2013
— IFC, a member of the World Bank Group, and Bank of Shanghai today launched a 500 million yuan ($80 million) financing and advisory program to support energy-efficiency and renewable-energy projects among small and medium enterprises in China.
The facility helps mitigate Bank of Shanghai’s credit risk and also provides technical advice when financing energy-efficiency improvement projects and renewable-energy projects undertaken by small and medium enterprises. Four new banks have now joined IFC’s China Utility-based Energy Efficiency Finance Small and Medium Enterprises (CHUEE SME) Program over the past half-year.
“We have a very long-standing and solid relationship with IFC”, said He Qing, Bank of Shanghai’s Vice President. This collaboration will provide loans that will assist smaller businesses and accelerate the economy’s shift to a more sustainable model by helping the environment.”
Bank of Shanghai is China’s second largest city bank by assets and was the first bank to partner with IFC in China. It has a strong reputation in serving smaller businesses in and around Shanghai, with outstanding loans to smaller enterprises achieving 32.5 billion yuan ($5.2 billion), or nearly 9 percent of the bank’s total loan portfolio.
IFC pioneered foreign investment in the Chinese banking market, starting with technical advice and later expanded to investments. IFC provided Bank of Shanghai with technical assistance from 1995, before making an equity investment in 1999, representing one of the first foreign investments in China’s banking sector. IFC was a shareholder in Bank of Shanghai until 2011, helping the bank adopt international best practices in key areas such as risk management, portfolio quality and corporate governance.
“The financing and advisory program signed today demonstrates how IFC harnesses the power of banks and the private sector in the global fight against climate change,” said IFC Executive Vice President and CEO, Jin-Yong Cai. “The program helps financial institutions better understand the energy-efficiency and renewable-energy sectors.”
IFC established CHUEE in 2006. By the end of 2012, banks participating in the program had provided loans worth $783 million to 178 energy-efficiency and renewable-energy projects, reducing greenhouse-gas emissions by 19.3 million tons a year. This is roughly the equivalent of the annual emissions of 40 medium-sized coal-fired power plants. CHUEE SME is a program that supports energy-efficiency and renewable-energy projects by small and medium enterprises. Through CHUEE SME, IFC partners with Chinese banks to provide a risk-sharing facility and advisory services that is expected to benefit 175 to 350 small and medium enterprises in their energy efficiency and renewable energy projects in China. Industrial Bank, Bank of Beijing and Bank of Nanjing are also participating in this program.
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