Submitted by: International Finance Corporation
Posted: May 17, 2006 – 12:00 AM EST
May 17 /CSRwire/ -
"IFC's energy efficiency program in China provides a great opportunity to develop market-based solutions to address environmental issues," said IFC Executive Vice President Lars Thunell, who signed today's agreement. "IFC is proud to partner with XinAo Gas and to assist the Chinese government in achieving a key policy objective --reducing energy consumption through energy efficiency and conservation measures."
IFC's program brings together, for the first time, three parties - a utility company, suppliers of energy efficiency equipment, and commercial banks - to create a new financing model for the promotion of energy efficiency. XinAo Gas will act as a marketing agent to commercial banks, providing services to its customers to prepare energy efficiency projects for investment. The grant will help XinAo Gas to rapidly develop market capabilities and increase awareness among small companies of the benefits of energy efficiency. Overall, IFC's program will support over $150 million in energy efficiency projects and equipment investment, which in turn are expected to achieve greenhouse gas reductions of about 5 to 10 million tons.
"XinAo Gas has emerged as a comprehensive energy services provider, focusing on the development of clean energy supplies and distribution. IFC's China Utility-Based Energy Efficiency Finance Program provides our company with an excellent opportunity to further enhance our clean energy strategy," stated Chairman Wang Yusuo of the XinAo Gas. "XinAo Gas is proud to be selected by IFC to be the first utility to participate in the program. We will commit our full attention and resources to develop an energy efficiency business line with the aim to reduce the impacts of economic growth on the environment."
The new financing model is a result of IFC's energy efficiency experience in other countries and its local knowledge of China. IFC found that utilities, such as gas or electricity distributors, can be effective agents for marketing and delivering energy efficiency projects. Utilities can act as a "one-stop-shop" to offer advice on reducing energy consumption and pollution, and equipment such as gas boilers and heating systems to realize these improvements. At the same time, utilities can partner with commercial banks which provide loans for the equipment.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
IFC fulfills three functions related to environment and social development. Managing environment and social risks associated with the projects it finances via environmental and social standards which are required of its clients companies; collaborating with client companies to find business opportunities arising from the protection of the environment and social development; exploring and developing new financial products to create new business opportunities linked with the environment and social development.
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