Background

As promoted by the Chinese government, renewable energy and energy efficiency projects are undergoing tremendous development in China and there is increasing need for finance and investment. However, many Chinese banks are still not well aware of the project features., revenue structures and risk profiles of clean energy projects and lack specific assessment tools. The clean energy finance market in China still lags behind that in the developed countries.

For the market to develop widely, it is vital to develop new financial tools and risk mitigation instruments for financing RE and EE projects.

Purpose

To develop a transparent and competitive financial market so that a wide range of financial tools and risk mitigation instruments are available for RE and EE projects in China.

Main Activities

• Identify and analyze the revenue structures and risks (including CDM revenue and CDM risks) of different types of RE/EE projects in general, and  specific situations in China
• Develop new financial tools and risk mitigation instruments for RE/EE projects based on Chinese conditions and global best practices
• Establish a RE/EE network of financial institutions in China
• Identify and develop a strategy to establish a RE/EE finance facility within the FI network;
• Hold an international workshop to disseminate the tools and risk mitigation instruments
• Carry out pilot projects using the new financial and risk mitigation tools and produce case studies
• Disseminate project outputs by distributing the reports and holding a national workshop involving government agencies from the RE, EE and finance sectors.

Expected Impact

• Improved access for Chinese RE/EE projects to different types of financial facilities.
• Deeper understanding of the revenue sources and risk structures of different types of RE/EE projects amongst Chinese financial institutions
• A set of financial tools and risk mitigation instruments for RE/EE projects available
• Improved coordination and cooperation between banks and promote the development of a market-based RE/EE financing mechanism
• Longer term influence on Chinese government policies to develop RE and EE industries.