• Haitai, based in Tianjin, was established in 2005. In the past 5 years, the Company has paved over 600 km of roads in China with its RMA product. The Company management is an important player in the research and commercialization of waste tire RMA in China. • SBCVC is a leading venture capital firm in China established in 2000 focusing largely on IT and clean technologies. • IFC will invest alongside Softbank China Venture Capital, (“SBCVC”) through its affiliate RMB Fund. Haitai will be the IFC’s fourth investment with SBCVC.

The total project cost is estimated at $30 million. IFC is considering an investment of up to $10 million, in the form of equity, warrants and/or debt.

10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.0

* These investment figures are indicative

While the first projects have been in Tianjin, Haitai has expanded its presence in Hebei and Anhui, which currently makes up majority of its project portfolio. The Company plans to expand further into other frontier regions, including Shijiazhuang, Xinjiang, and Inner Mongolia.

There is growing need for better management of natural resources and pollution in the continued economic and population growth of China and the rest of the world. Natural resource management and reduced utilization of fossil-fuel based resources are important for both climate change and sustainable growth. While much emphasis has been put into supporting China's domestic industries, with construction the 4th largest in energy consumption, the efforts to reduce the energy intensity of China's growth (especially with growing environmental pressures and the global financial crisis) are a continuing and significant effort that is increasingly being stressed by the national government and international community. Companies like Haitai are emerging as critical drivers of innovation in natural resource management and energy efficiency, particularly in China. Haitai is contributing to the development of the clean technology sector in China and assisting the government of China to adopt higher quality and more environmentally friendly roads. An investment in this industry will greatly support the Company's ability to develop and grow in the domestic clean technology sector, by expanding to the frontier regions where China's planned expressway network will reach. The investment may also help Haitai transfer knowledge and products to other developing regions outside of China. The Project will have significant developmental impact by: i. Contributing to the development of the clean technology sector in China; ii. Assisting the government of China in achieving its transport construction goals while at the same time reducing cost and impact to the environment; iii. Using 300,000 tons of RMA asphalt can save 60,000 tons of petroleum (105,000 tons CO2 equivalent compared to paving with conventional SBS modified asphalt), use up nearly 10 million pieces of waste tires, and reduce RMB200 mm in construction cost.

Support a clean technology company expanding into the frontier regions: IFC's support will be critical to the expansion of Haitai's business into the frontier regions, and to providing additional demonstration that more efficient use of resources is an important and viable area of investment. This support extends to Haitai's management capabilities, as IFC will help the Company expand to markets in other regions and potentially beyond its initial target market. Access to finance: Local financing channels are typically not able to lend long-term to new, high growth business models for example without security, which may result in limited access to finance for otherwise viable projects. This Project can potentially benefit from IFC's China Utility Energy Efficiency Program (CHUEE) that could provide risk sharing to the local financiers. Knowledge transfer: IFC will assist Haitai to further develop its processes and equipments to drive cost down even lower so that they can be adopted in other developing regions of the world and new markets that are facing similar demands in infrastructure growth and constraints in natural resources. Potential for CERs: Haitai's potential for using the Clean Development Mechanism (CDM) to generate Certified Emission Reductions (CERs) is consistent with IFC's role in expanding the carbon market to benefit new sectors such as waste recycling and transportation sectors. Beyond Haitai's potential CDM projects, a new CDM methodology allowing for projects using road pavement recycled from waste tires would be a global public good. Institute good corporate governance: IFC will assist Haitai in instituting best-practice corporate governance, including in developing and expanding its business.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. A limited number of environmental and social impacts will result from the project, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Key environmental, health and safety, human resources and social issues that were reviewed included: environmental and social management system (scope and implementation); labor and working conditions, including life and fire safety and supply chain labor practices; emissions to the environment; and acquisition of land use rights. Haitai has an existing management program and has presented specific plans to address key issues and gaps to ensure compliance with local regulatory requirements as well as consistency with IFC Performance Standards and applicable environmental, health and safety guidelines. Since this investment will be used to support joint venture projects currently being identified, going forward, for each joint venture, the Company shall consider all relevant social and environmental risks and impacts, including the issues identified in PS1 through PS8.

Complete details on IFC’s Environmental and Social assessment of this project may be found in the Environmental and Social Review Summary prepared by IFC, which also will be made publicly available on the IFC website.