34463 - CHUEE Rizhao

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Summary of Investment Information

Project Number

34463

Company Name

Bank of Rizhao Co., Ltd.

Date SPI Disclosed

Mar 5, 2014

Country

China

Region

East Asia and the Pacific

Projected Board Date

Apr 7, 2014

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Apr 25, 2014
Signed : Jun 24, 2015

Sector

Commercial Banking - General

Project Description

IFC is in discussion with Bank of Rizhao (“BOR”) to enter into a risk sharing facility (“RSF”) to support energy efficiency (“EE”), renewable energy (“RE”), and water efficiency (“WE”) projects with private enterprises in Shandong province (the “Project”). IFC would take credit risk in a loan portfolio to be originated and funded by BOR. The Project is expected to receive support from the China Clean Development Mechanism Fund (“CDM Fund”), Shandong Provincial Government, and Chinese Central Government.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	24.01
Loan
Equity

Development Impact

Environmental benefit: Upon full ramp-up of the RSF, 89,112 tons of CO2 emission is estimated to be reduced per year;
Access to finance: About 25 EE, RE and WE projects will be financed under this project and most of the borrowers are expected to be SMEs. During the course, the Bank is expected to change its risk perception of EE, RE and WE loans and would be willing to extend more credits to address EE, RE and WE demand;
Capacity Building: The Project will help the Bank establish its internal capacity in identifying and assessing EE/RE/WE projects and get ready to expand the EE/RE/WE products offering in the future; and
Demonstration effect: The success of the Project will encourage more banks in Shandong to provide the much needed EE/RE/WE funding to local business. The Project, as an innovative PPP (Public Private Partnership) initiative to address China's climate change agenda, will also set a role model for other provinces across China.

IFC's proven records in EE, RE, and WE financing through CHUEE model in China enables IFC to mobilize the first loss funding from Chinese central government, Shandong provincial government and CDM Fund to support the Bank's initiative to promote EE, RE and WE lending in Shandong province; and
IFC, with its advisory services team and strong global technical expertise, could support the Bank to build its internal capacity to implement EE, RE, and WE lendings.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project involves an unfunded RSF aimed to support small to medium sized EE, RE and WE projects and has been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. The RSF target projects entail limited advance E&S risk and impacts that are few in number, generally site-specific, largely reversible and can be readily addressed through mitigation measures. Under the Project, BOR will be required to screen and manage the RSF projects against the IFC Exclusion List, applicable Chinese E&S laws and regulations, and IFC Performance Standards where applicable.

The key E&S risks and impacts of the Project derive from the E&S risks of RSF projects and the capacity and system of BOR in place to manage these risks. At present BOR does not have a formal Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management in respect to its lending activities. No staff/department has been assigned responsibility for overseeing the overall E&S risk management. BOR was found to be in compliance with China’s labor laws and regulations and generally in line with IFC Performance Standard 2 Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Bank of Rizhao Co,Ltd
No.197, Yantai Road
Rizhao 276800
Shandong, China
Telephone: 86-633-8781988
Fax: 86-633-8781479
Website: http://www.bankofrizhao.com.cn

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Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

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Task Description	Anticipated Completion Date
Nomination of E&S Officer	On or prior to Commitment
Submission of ESMS document along with ESMS	On or prior to the date the RSF is effective
Implementation Plan	Implementation of ESMS Within 3 months from the date the RSF is effective

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