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China CDM Fund Management Center Signed “Green Innovation Investment Business” Cooperation Agreement with Hunan Provincial Department of Finance

2019-12-20

China CDM Fund Management Center Signed “Green Innovation Investment Business” Cooperation Agreement with Hunan Provincial Department of Finance and Industrial Bank Changsha Branch 

On December 6th, the China CDM Fund Management Center (hereinafter referred to as “the CDM Fund”) signed “Green Innovation Investment Business” Cooperation Agreement with the Hunan Provincial Department of Finance and the Industrial Bank CO., Ltd Changsha Branch (hereinafter referred to as “Industrial Bank Changsha Branch”) on the 2019 Hunan “One Belt One Road” Green Expo. Deputy Director General of the CDM Fund Mo Xiaolong, Deputy Director General of the Hunan Provincial Department of Finance Li Bingli and Chairman of the Industrial Bank Changsha Branch Hong Wenli attended the signing ceremony and signed the Agreement.

The CDM Fund is a policy-oriented fund established upon national approval and operated in market fund approach, with principles of supporting national efforts in combating climate change and promoting the sustainable development of the economy and society. As a supplementary funding mechanism for national financial support to respond to climate change and energy conservation and emission reduction efforts, the CDM Fund gives full play to the role of being the bridge between the government and the market, fiscal and financial, international and domestic affairs, and through clean development concessional loans (hereinafter referred to as the "clean concessional loan") and other paid-use ways to lead and leverage market funds to support green and cyclic low-carbon development. By the end of this November, the CDM Fund had accumulatively implemented 301 clean concessional loan projects in 27 provinces, municipalities and districts nationwide, with a total loan amount of RMB 18,428 million, and leveraged social capital of nearly RMB a hundred billion.

Hunan Province is one of the earliest provinces to carry out clean development concessional loans. Since 2011, 20 projects have received clean development concessional loans of RMB 1,284 million. When the projects are put into production, it’s estimated that 1,629,300 tCO2e can be reduced annually. The Industrial Bank is the first Equator Bank in China and its Changsha Branch has been positively supporting the green industry development of Hunan Province with firmly accordance with the green financial ideas and strategies of the head office. By the end of November 2019, the green finance made by the Industrial Bank exceeded RMB 100 billion and the balance is RMB 34.3 billion, and the number of green finance cooperative customers reached 389. 

The “Green Innovation Investment Business” is an innovation made by the CDM Fund to implement national green development strategy based on years of experience in the traditional clean development concessional loan model of the CDM Fund and provincial financial departments. It introduces financial institutions to share risks and is jointly initiated by the three parties to support local green low-carbon development, energy conservation and emission reduction, and other project-based debt investment businesses that are conducive to combating climate change. By signing the agreement, it is determined that the main contents of the modality for cooperation and operational procedures include the Hunan Provincial Financial Department organizesproject declaration, the CDM Fund provides policy concessional funds, the Industrial Bank Changsha Branch issues demand financing guarantees for projects and service fees are partially subsidized by the provincial finance department, while  project enterprise obtains concessional loans at an interest rate lower than the benchmark..

The realization of cooperation on Hunan's "Green Innovation Investment Business" signifies that under the new situation, the CDM Fund, the Hunan Provincial Department of Finance and the Industrial Bank Changsha Branch will continue to strengthen cooperation with each other to build up a mechanism conducive to Hunan's efforts in energy-saving and emission reduction, as well asgreen and low-carbon industrial development. The three parties will take this signing as a new starting point to continue to carry out the concept of "lucid waters and lush mountains are invaluable assets", and strive to bring respective advantages and professional capabilities into play to jointly boost the low-carbon transformation and development of the real economy of Hunan Province and together build a green Hunan.

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