Promoting sustainable finance for clean energy projects in China

Background

As the Chinese government began encouraging investment in renewable energy, the number of renewable energy and energy efficiency projects implemented in the country began to grow rapidly. These projects were very different from traditional utility or commercial projects, because they had different revenue and profit models and also faced different risks. The Clean Development Mechanism (CDM) added further complexity to the financial and risk analysis for renewable energy projects. These and other factors made it difficult for project developers to access credit.

This project, implemented by REEEP and the China Development Bank (CDB), aimed to improve access to finance for clean energy projects by raising awareness of the characteristics, revenue structures and risk profiles of clean energy projects among Chinese banks. An additional goal was to develop a set of financial tools for conducting financial analysis as well as instruments for assessing and mitigating the risks of RE/EE projects in China. The project also aimed to set up a network of Chinese financial institutions for sharing information on RE/EE projects.

Outcomes

The project was deemed a success. A set of financial tools was developed, several reports on revenues, risks and risk management for RE and EE projects were produced, and more than 30 financial institutions and related organisations attended the workshops organised by the project implementer. No network of financial institutions as described in the aims was formed and it is difficult to quantify exactly how much impact this particular project had on the general boom of the Chinese renewable energy industry. However, it can be said with confidence that it contributed to the financial institutions’ understanding of the field and increased their ability to capture the growth of the renewables and energy efficiency investment market.

Programme sector: 

RE & EE (Business&Finance)

Stage of project: 

Completed

Location: 

CN/China

Duration: 

2009 - 2010

Budget: 

€ 167,200 including co-funding from China Development Bank

Implementing agency: 

IT Power China

REEEP grant funded by:

United Kingdom

Norway