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potential energy efficiency programme, verification and evaluation of energy efficiency
programmes, creation of energy administration network and provision of technical
consultation, etc. Two domestic commercial banks participating in CHUEE Phase I have
rapidly enlarged the loan portfolio of energy-efficiency programmes by making use of
the loss-sharing facility.
Two phases of the CHUEE programme as designed by IFC have provided the risk-
sharing facility with an amount of USD 215.5 million, including a USD 16.5 million
grant by GEF as the primary risk sharing facility of bank’s loans. By the end of 2011,
the cooperated banks of CHUEE had provided loans with the amount of nearly
USD 700 million and supported more than 160 energy efficiency and renewable energy
programmes.
The innovation of CHUEE lies in its ability to exert the function of public funds to
the greatest extent and lever more market funds, including the capital of the banks and
IFC, which is mainly reflected in the application of GEF grants. WB, while evaluating
the CHUEE programme in 2010, believed that the basic probability of default that GEF
would compensate such losses is 4 per cent; nevertheless, as of today, there no loan
loss has occurred. GEF’s grant has repeatedly shown its leverage role in releasing,
collection and reuse, levering the banks’ capital and greatly supporting the energy-
efficiency financing.
The Chinese cooperative banks of CHUEE have also launched special businesses
with such support. Take CHUEE Loan (Phase II) of Industrial Bank for example; CHUEE
Loan (Phase II) is mainly for the energy-efficiency programme, renewable energy
programme, and emission-reduction programme so as to improve energy efficiency and
reduce greenhouse gas emission. Among these, the energy-efficiency programme is the
programme with updated equipment, optimized design and energy recovery and use,
etc., as the means and with the purpose of saving primary energy such as coal, oil and
natural gas and secondary energy such as electricity and stream, etc.; renewable energy
programme refers to the production and use of non-fossil energy such as wind energy,
solar energy, water energy, biomass energy, geothermal energy and ocean energy, etc.
and pure emission-reduction programme is the programme as implemented under
clean energy mechanism framework with greenhouse gas reduction. The main revenue
of the programme is mainly from sales of certified emission reduction.
As an important source of international funds, green credit could
effectively promote the development of domestic green credit.
Green credit may have two functions as a financing source for local
governments to facilitate low carbon economy growth: firstly, provide
the additional source for local governments to finance directly (that
is, size effect); secondly, green credit may drive the private sector to
invest more so that the local government may save the investment
expenditure (that is, substitution effect).
130 Low Carbon Development in China and India
programmes, creation of energy administration network and provision of technical
consultation, etc. Two domestic commercial banks participating in CHUEE Phase I have
rapidly enlarged the loan portfolio of energy-efficiency programmes by making use of
the loss-sharing facility.
Two phases of the CHUEE programme as designed by IFC have provided the risk-
sharing facility with an amount of USD 215.5 million, including a USD 16.5 million
grant by GEF as the primary risk sharing facility of bank’s loans. By the end of 2011,
the cooperated banks of CHUEE had provided loans with the amount of nearly
USD 700 million and supported more than 160 energy efficiency and renewable energy
programmes.
The innovation of CHUEE lies in its ability to exert the function of public funds to
the greatest extent and lever more market funds, including the capital of the banks and
IFC, which is mainly reflected in the application of GEF grants. WB, while evaluating
the CHUEE programme in 2010, believed that the basic probability of default that GEF
would compensate such losses is 4 per cent; nevertheless, as of today, there no loan
loss has occurred. GEF’s grant has repeatedly shown its leverage role in releasing,
collection and reuse, levering the banks’ capital and greatly supporting the energy-
efficiency financing.
The Chinese cooperative banks of CHUEE have also launched special businesses
with such support. Take CHUEE Loan (Phase II) of Industrial Bank for example; CHUEE
Loan (Phase II) is mainly for the energy-efficiency programme, renewable energy
programme, and emission-reduction programme so as to improve energy efficiency and
reduce greenhouse gas emission. Among these, the energy-efficiency programme is the
programme with updated equipment, optimized design and energy recovery and use,
etc., as the means and with the purpose of saving primary energy such as coal, oil and
natural gas and secondary energy such as electricity and stream, etc.; renewable energy
programme refers to the production and use of non-fossil energy such as wind energy,
solar energy, water energy, biomass energy, geothermal energy and ocean energy, etc.
and pure emission-reduction programme is the programme as implemented under
clean energy mechanism framework with greenhouse gas reduction. The main revenue
of the programme is mainly from sales of certified emission reduction.
As an important source of international funds, green credit could
effectively promote the development of domestic green credit.
Green credit may have two functions as a financing source for local
governments to facilitate low carbon economy growth: firstly, provide
the additional source for local governments to finance directly (that
is, size effect); secondly, green credit may drive the private sector to
invest more so that the local government may save the investment
expenditure (that is, substitution effect).
130 Low Carbon Development in China and India
