Energy efficiency finance in China gets green light

February 19, 2015
Chinese Government issues guidelines to Chinese financial institutions to encourage investment in energy efficiency projects.

The China Banking Regulatory Commission and China’s National Development and Reform Commission (NDRC) has just issued new guidance to China’s banks on how to assess, finance and monitor energy efficiency (EE) loans to further support the country’s efforts to ramp up energy efficiency efforts.

In addition to providing official encouragement for EE financing operations, the guidelines provide unusual detail, especially on bank risk management in dealing with both direct EE loans and standard loans to energy service companies.

IIP-China Country Director Wan Yang says the inclusion of risk-management details in the guidelines is an important element for bankers looking to minimize their risk as they develop their EE investments.  

“The guidelines provide a roadmap to success for financial institutions looking to expand into the EE sector in China. They include such detail as loan appraisal and application procedures, and focus on specific aspects of EE loans to help financial institutions manage risks. They also include formal encouragement for expanding the EE lending business and furthering innovation.”

The Institute for Industrial Productivity (IIP) was involved throughout the development and approval of the guidelines – from initial discussions right through to completion, and provided technical input and comments on drafts.

Read the English translation of the guidebook on our website.
The original Chinese version is also available on our Chinese website.