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CDM Fund Signed “Green and Innovative Investment Business” Cooperation Agreement with Shanxi Provincial Department of Finance and Jinshang Bank

2019-09-18

China CDM Fund Management Center Signed “Green and Innovative Investment Business” Cooperation Agreement with Shanxi Provincial Department of Finance and Jinshang Bank

Recently, China CDM Fund Management Center (hereinafter referred to as “the CDM Fund”) signed Green and Innovative Investment Business Cooperation Agreement with Shanxi Provincial Department of Finance and Jinshang Bank.

“Green and Innovative Investment Business” is an innovation made by the CDM Fund to implement national green development strategy and also an important initiative to practice the principles of the 19th National Congress of CPC under new circumstances. The CDM Fund, together with Shanxi Provincial Department of Finance and Jinshang Bank created the “Green and Innovative Investment Business” of Shanxi Province based on consideration, researches and discussions in the past over one year and learning from practical experience of traditional clean development concessional loan and the “Green and Innovative Investment Business” of Jiangsu Province.

Shanxi Province is one of the earliest provinces to carry out clean development concessional loans. Since its launch in 2011, Shanxi Province has successfully applied for 30 projects with a totalamount of RMB 1.421 billion, ranking among the top provinces in terms of the number of projects and the amount of loans. The implementation of cooperation on the “Green and Innovative Investment Business” in Shanxi indicates that the CDM Fund and the Shanxi Provincial Department of Finance will continue to strengthen cooperation with each other under the new situation and jointly build up an institutional mechanism conducive to the development of energy saving and emission reduction and green and low carbon industry in Shanxi Province.

Under the business model, the CDM Fund provides loans for the project, Jinshang Bank can provide supporting loans, and the Shanxi Provincial Department of Finance gives moderate subsidy to ensure that energy-saving and carbon emission reduction projects can enjoy preferential support lower thanthe market interest rate. The business mainly supports industrial activities in Shanxi Province that are conducive to generating climate change benefits, including but not limited to areas of renewable energy and new energy development and utilization, technologically advanced energy-saving and emission reduction product development and industrial production, and centralized heating, cogeneration and waste heat utilization and others. “Green and Innovative Investment” projects mainly make investment as creditor’s rights. In principle, the investment period of a single project is no more than 3 years. As to projects for public good and have long return on investment, the period can be extended to 5 years. Project selection is carried out by the local operating agencies of Jinshang Bank. Departments of finance at all levels in Shanxi Province can recommend projects to Jinshang Bank. For projects that meet the requirements of “Green and Innovative Investment Business”, Jinshang Bank organizes project due diligence, and the Provincial Department of Finance organizes project carbon emission reduction calculations and makes declarations to the CDM Fund, which reviews the project.

General Secretary Xi Jinping emphasized in the report at the 19th CPC National Congress that "developing green finance, strengthening energy-saving and environmental protection industries, clean production industries and clean energy industries" and "continuously implementing the Action Plan for Prevention and Control of Air Pollution and winning the Blue Sky Protection Campaign". This points out the direction for the next step of developing the “Green and Innovative Investment Business” and also shows a rare opportunity to make vigorous development. We will conscientiously implement the spirit of the 19th CPC National Congress, take the initiative to strengthen project development, give full play to the demonstration and leading role of the CDM Fund, and make positive contributions to national green and low-carbon development and ecological civilization construction.


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