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Among these, IFC has begun to explore cooperation with local 2.2
governments in energy efficiency financing on the basis that the China
Utility-Based Energy Efficiency Finance Program (CHUEE), developed
by the International Financial Corporation (IFC), has achieved success
at an earlier stage, so as to popularize the practice of promoting
energy efficiency financing by adopting risk sharing facility in more
areas. In 2011, IFC executed the memorandum of understanding on
energy saving and emission reduction financing programme with the
Hongzhou municipal government to set up risk-sharing mechanisms so
as to support renewable resources, water resource utilization and clean
technology application, etc. At the end of 2012, IFC initiated CHUEE
(China Utility Based Energy Efficiency Finance) Jiangsu Program with
the cooperation of Clean Fund (International Department of Ministry
of Finance, Finance Department of Jiangsu Province). The programme
commits to invest RMB 462 million (including RMB 372 million invested
by IFC) to lever the Bank of Jiangsu and enlarge the energy saving and
emission reduction loan scale by offering loss risk sharing for the Bank
of Jiangsu when it provides energy saving and emission reduction
loans—this will foster domestic private enterprises to engage in energy
efficiency, renewable energy, and relevant equipment manufacturing
programmes in Jiangsu province. The Bank of Jiangsu has offered such
loans to an amount of RMB 924 million.
Box 2.14: China Utility-based Energy Efficiency Program
(CHUEE) of International Financial Corporation and Green
Credit Products of Cooperative Banks
CHUEE is co-developed by IFC and the Chinese government and co-funded by GEF,
Finland government and Norway government. It is the new financing model specially
designed for Chinese enterprises to improve energy efficiency, use clean energy, and
develop the renewable energy programme.
The basic principle of CHUEE is that ICF, with the cooperation of commercial
banks provides a partial risk-sharing facility and helps banks to evaluate the risks and
business opportunities of energy efficiency and renewable energy industry. At the same
time, IFC would motivate GEF (grant) as the primary loss bearer of IFC. However, the
responsibilities of the banks are not relieved while they are motivated, as the banks
would share the primary and secondary losses. If there is any loss, the banks will share
such losses and its balance sheet will be affected thereby. While effectively stimulating
the banks to provide energy efficiency loans, CHUEE has not greatly reduced the banks’
duties in verifying the loan programmes. At the same time, IFC offers a package of
technical assistance, including market research, engineering technology, programme
development and equipment financing, etc., and assists banks to develop the
Chapter 2 Innovative Financing for Low Carbon Development 129
governments in energy efficiency financing on the basis that the China
Utility-Based Energy Efficiency Finance Program (CHUEE), developed
by the International Financial Corporation (IFC), has achieved success
at an earlier stage, so as to popularize the practice of promoting
energy efficiency financing by adopting risk sharing facility in more
areas. In 2011, IFC executed the memorandum of understanding on
energy saving and emission reduction financing programme with the
Hongzhou municipal government to set up risk-sharing mechanisms so
as to support renewable resources, water resource utilization and clean
technology application, etc. At the end of 2012, IFC initiated CHUEE
(China Utility Based Energy Efficiency Finance) Jiangsu Program with
the cooperation of Clean Fund (International Department of Ministry
of Finance, Finance Department of Jiangsu Province). The programme
commits to invest RMB 462 million (including RMB 372 million invested
by IFC) to lever the Bank of Jiangsu and enlarge the energy saving and
emission reduction loan scale by offering loss risk sharing for the Bank
of Jiangsu when it provides energy saving and emission reduction
loans—this will foster domestic private enterprises to engage in energy
efficiency, renewable energy, and relevant equipment manufacturing
programmes in Jiangsu province. The Bank of Jiangsu has offered such
loans to an amount of RMB 924 million.
Box 2.14: China Utility-based Energy Efficiency Program
(CHUEE) of International Financial Corporation and Green
Credit Products of Cooperative Banks
CHUEE is co-developed by IFC and the Chinese government and co-funded by GEF,
Finland government and Norway government. It is the new financing model specially
designed for Chinese enterprises to improve energy efficiency, use clean energy, and
develop the renewable energy programme.
The basic principle of CHUEE is that ICF, with the cooperation of commercial
banks provides a partial risk-sharing facility and helps banks to evaluate the risks and
business opportunities of energy efficiency and renewable energy industry. At the same
time, IFC would motivate GEF (grant) as the primary loss bearer of IFC. However, the
responsibilities of the banks are not relieved while they are motivated, as the banks
would share the primary and secondary losses. If there is any loss, the banks will share
such losses and its balance sheet will be affected thereby. While effectively stimulating
the banks to provide energy efficiency loans, CHUEE has not greatly reduced the banks’
duties in verifying the loan programmes. At the same time, IFC offers a package of
technical assistance, including market research, engineering technology, programme
development and equipment financing, etc., and assists banks to develop the
Chapter 2 Innovative Financing for Low Carbon Development 129
