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Position:BCAA News»World Bank provides $500 million loan to support China's air pollution battle in Jing Jin Ji region

World Bank provides $500 million loan to support China's air pollution battle in Jing Jin Ji regionPost date: 2016-04-20

On March 22, 2016, World Bank Board of Executive Directors approved a loan of USD $500 million to China to support an initiative around innovative financing for air pollution control in the Jing-Jin-Ji region. The new initiative aims to reduce air pollutants and carbon emissions by increasing energy efficiency and clean energy, with a focus on the Jing-Jin-Ji and neighboring regions, specifically Beijing, Tianjin, Hebei, Shandong, Shanxi, Inner Mongolia, and Henan.

This initiative will help implement China’s Air Pollution Prevention and Control Action Plan, released by the State Council, and push commercial banks to further develop their green credit systems. This initiative will also help Hua Xia Bank provide loans to support enterprises with emission reduction goals.  

The Program objective will be achieved through three main areas:

(I) reduced coal consumption from improved energy efficiency in the industrial and building sectors, and increased renewable energy supply of solar PV, wind, and biomass technologies;

(II) reduced air pollution emissions from pollution abatement measures including installing end-of-pipe equipment for particulate removal, flue gas desulfurization, and denitrification; replacing coal with natural gas, and electric and compressed or liquefied natural gas vehicles; and

(III) stronger institutional capacity of the Hua Xia Bank, including establishing a Green Finance Center, developing green lending procedures, piloting of innovative financing models and products, and staff training.

The total investment requirements of the initiative is expected to be USD $1.4 billion, comprising USD $500 million from the World Bank, USD $500 million from the Hua Xia Bank, and an additional USD $400 million equity contribution from sub-borrowers. The program will be implemented in a period of six years, from 2016 to 2022.

Starting from August 2015, the Innovation Center for Clean-air Solutions (ICCS), the secretariat of Clean Air Alliance of China (CAAC), has been commissioned by the World Bank and the Energy Foundation, and provided background research and technical support around this lending program design. ICCS produced“Jing-Jin-Ji Regional Air Quality Management Policy Implementing Analysis” (hereinafter Report) and submitted to the World Bank. The Report analyzed Jing-Jin-Ji region’s various pollution prevention and control measures and action plans and emission reduction potentials. The Report also focused on overall coal reduction policies and measures including energy efficiency and renewable energy development measures, and the financing needs in order to implement various air pollution control measures.