The project/facility will include an existing partner under the CHUEE I faculty, Industrial Bank, and is expected to include other partners over time.

- Industrial Bank (IB):

Founded in 1988, IB is headquartered in Fuzhou City, Fujian Province, and is one of the first joint-stock commercial banks approved by the State Council and the People''s Bank of China. On February 5, 2007, IB was listed on Shanghai Stock Exchange (Stock Code: 601166) with total registered capital amount RMB 5 billion. IFC acquired a 3.4% equity stake in IB in 2004.

IB joined the CHUEE program as the first bank partner and started EE loan origination and processing in January 2007. Up till now, IB’s commitment in CHUEE program is evidenced by its success in ramping up the CHUEE I portfolio and its building of a strong deal pipeline. Given its commitment and success in EE financing, IB became the first Chinese financial institution to be nominated for two of the Financial Times 2007 Sustainable Banking Awards and achieved runner-up in the Sustainable Deal of the Year category.

IFC’s investment in the project will be the RMB equivalent of $170 million in the form of risk sharing liabilities on IFC’s own account.

171.96 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	171.96
Loan
Equity

* These investment figures are indicative

The project will be managed out of Beijing.

The project is expected to generate significant impact in China’s EE market development, environmental improvements and financial market development.

- Improved energy usage:

China is facing growing challenges of energy resource shortage. This is largely caused by the fast growing economy and lower efficiency in production and consumption of energy. Promotion of EE projects and expanded use of renewable energy has been proven the most effective approach to address these issues and therefore has become a high priority for Chinese government.

This project will have very positive impacts on the development of China’s EE sector. With the increased investment amount, this scaling-up project will help IFC to support a significantly larger number of EE projects which are otherwise illegible for bank’s traditional financing. The energy and cost savings achieved from these projects will have significant impacts on the improvement of energy usage in China.

IFC has over ten years of experience in EE financing, particularly in Central and East Europe and IFC is well positioned to leverage its experience into other regions. In China, EE finance is a relatively new and under-developed sector because of “high risk” perceived by commercial banks and private investors. As a result it is difficult for EE projects to get financing from traditional funding channels although the projects yield tangible social and commercial benefits. IFC’s CHUEE is designed to help fill this gap.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the participating banks’ portfolio/pipeline activities proposed to be supported by this facility for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of: The IFC FI Exclusion List, The applicable National Social and Environmental Laws and regulations, and/or The IFC Performance Standards.

IFC will also review, if required, the capacity of the banks availing of the RSF to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). If required, IFC will suggest Supplemental Actions to address any gaps in the SEMS. Based on the review, the project will be required to:

- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.