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The Case of China CDM Fund

The Case of China CDM Fund. -- focusing on the type of fund, governing body and capital. XIE Fei Director, Revenue Management Department China Clean Development Mechanism Fund September 7, 2012 Bangkok, Thailand. Rationale of Establishing China CDM Fund.

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The Case of China CDM Fund

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  1. The Case of China CDM Fund -- focusing on the type of fund, governing body and capital XIE Fei Director, Revenue Management Department China Clean Development Mechanism Fund September 7, 2012 Bangkok, Thailand

  2. Rationale of Establishing China CDM Fund Unique Points of Chinese CDM Policy: The Measures for Operation and Management of CDM Projects in China stipulates that the revenue generated by Chinese CDM project is shared by the government and project owner. Because the resource of GHG emission reduction is owned by the government. The government sharing, called as national revenue, is put in China CDM Fund, specifically supporting climate change activities.

  3. China CDM Fund at a glance • Establishment: November 2007. • Objective: To support China’s efforts in tackling climate change and promote sustainable development. • Governing body: Board of China CDM Fund; and China CDM Fund Management Center • Legal status: Public institution that integrates government and market functions. • Beneficiaries: Chinese institutions working on climate change.

  4. China CDM Fund Is A Revolving Fund • Major sources of the fund: • national revenue from Chinese CDM projects; • interest earned from its operation. • Current capital size: RMB 10 billion (about USD1.58 billion) Its capital size will become larger and larger gradually, depending upon CDM development.

  5. Governing Body • The Board of China CDM Fund consists of most climate change-related ministries in China: • Chair: National Development and Reform Commission ; • Vice Chair: Ministry of Finance; • Members: Ministry of Foreign Affairs Ministry of Science and Technology Ministry of Environmental Protection Ministry of Agriculture China Meteorological Administration

  6. Roles of The Board The Board of China CDM Fund is responsible for reviewing the following issues: • Management regulations; • Strategic planning of the Fund, including annual budget plan; • Application for grants and investments; • Annual budget and accounting; and • Other major undertakings.

  7. Roles of China CDM Fund Management Center China CDM Fund Management Centre performs the following duties: • Draw up fund regulations on management and operation; • Raise funds; • Manage the funds and carry out investments and wealth management activities; • Formulate and implement annual budget and accounting of the Fund; • Supervise and manage the operation of projects supported by the Fund; • Report major business activities of the Fund to the Board; • Other activities that serve the purpose of the Fund.

  8. Main Functions • China CDM Fund has the following two main functions to support addressing climate change and low carbon development in China. Policy research Software Construction International cooperation Grant Capacity building Public awareness China CDM Fund Equity investment Hardware Construction Concessional loans Support RE and EE through Portfolio guarantee All lending/investment projects are required to make a carbon budget.

  9. Major Activities & Business Operations --- software construction • Over 280 million RMB is granted to support over 130 projects on tackling climate change, including: • Updating China's National Climate Change Program; • Policy/strategy studies on climate change; • Preparation of provincial climate change planning; • Preparation of provincial GHG emission inventory； • Formulation oflow carbon development programs; and • Supporting carbon trading schemes in six pilot provinces/cities in China.

  10. Major Activities & Business Operations --- software construction(cont.) Preparation of climate change planning for 31 provinces/cities.

  11. Major Activities & Business Operations --- software construction(cont.) Formulation of Low carbon development programs & carbon trading schemes in pilots in China.

  12. Major Activities & Business Operations --- hardware construction • Principle: China CDM Fund plays a role as a seed capital that exploits market mechanism and mobilizes more social capital to support addressing climate change and low carbon development in China. • Requirement: Renewable, clean energy; energy efficiency. Carbon budget and MRV (monitoring, reporting & verifying). By the end of June 2011, • Investment: USD 360 million Financing projects: 45 • Location: 13 provinces (cities) • Leveraging social capital: over USD 2.8 billion

  13. Major Activities & Business Operations --- hardware construction (cont.) Projects financed by China CDM Fund includes: • Investment in Shanghai Environment and Energy Exchange, who supports Shanghai to be the first city/province implementing carbon trading scheme; • Renewable energy development: biomass, hydropower, solar power; • Energy efficiency enhancement: heating recovery, central heating system, natural gas replacing coal, energy saving products like inverter air conditioner compressor, LED lighting, electric bus.

  14. Major Activities & Business Operations --- hardware construction (cont.) Distribution of projects supported by China CDM Fund.

  15. Major Activities & Business Operations --- Other activities • Collaborate with World Bank, IFC, ADB, Deutsche Bank and other international and domestic banks, to explore innovative climate change financing mechanisms; • Be Involved in carbon market and climate financing policy research works; • Provide consulting services to domestic CDM project entities.

  16. For a low carbon future！ Thank you！ XIE Fei Director, Revenue Management Department xiefei@cdmfund.org Tel: +86-10-88659260Web: www.cdmfund.org

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