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Progress of Huaxia Bank's Green Credit Implementation

Explore Huaxia Bank's progress in implementing the CHEEF project, including loan disbursement, energy savings, and challenges faced. Learn about industries benefiting from green credit and future plans for promoting energy-saving initiatives.

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Progress of Huaxia Bank's Green Credit Implementation

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  1. CHEEF ProjectviaHuaxia Bank 2012.02 WASHINGTON

  2. Overall Progress of Huaxia’s Implementation • Huaxia Bank with “Green Credit” • Loan disbursement progress • Industries of loan disbursement

  3. Huaxia Bank with “Green Credit” • 2008.09.24：signed CHEEF project $100 Million;

  4. Overall Progress of Huaxia’s Implementation • Loan disbursement progress • As of December 31, 2011 • Leverage effect: $58 million IBRD funds leveraged $197 million from Huaxia own matching funds ($64 million) and enterprises’ equity and other sources ($133 million); • Supported 12 sub-projects; • Energy saving 580,000 tons of coal equivalent, and CO2 reduction 1.4 million tons

  5. Overall Progress of Huaxia’s Implementation • Industries of loan disbursement • Focus on: • waste heat • recovery of blast furnace gas

  6. Industries of loan disbursement

  7. “CHEEF” What we did? • CHEEF What we did? • Preparation stage (2005-2008) • Initial implementing stage (2009-2010) • Why failed? • Confronting challenges and seeking measures for improvement • Changes

  8. “CHEEF” What we did? • Preparation stage (2005-2008) • 2005: Huaxia Bank started negotiation with NDRC and the Ministry of Finance on implementing CHEEF project • 2007: doing market research on financing energy saving projects; collected 10 sub-projects • 2008.07: acquired the qualification to implement CHEEF project

  9. “CHEEF” What we did? • Initial implementing stage (2009-2010) • 2008.10: launched the financing of World Bank’s CHEEF project；collected potential sub-projects throughout the bank, selected 30 potential sub-projects • 2009.11: received sub-project China Haohua Chemical (Group) Corporation for its 11 subsidiaries;2010.12: disbursed funds to the enterprise. • 2010.06: received sub-project “China United Cement Corporation” the loan was disbursed in December

  10. “CHEEF” What we did? • Why failed? most of the sub-projects failed to satisfy NDRC’s requirement, reasons as follow: • Government’s requirements • World Bank’s requirements • Huaxia Bank’s credit risk management

  11. “CHEEF” What we did? • Difficuties during the Initial implementing stage • Financing risk difficult to control • Short of CHEEF project experiences

  12. “CHEEF” What we did? • Financing risk difficult to control The enterprises that conduct energy efficiency sub-projects mainly fall into two categories: • Medium- and small-sized enterprises: capital strength is weak • High energy consumers: national industrial policies

  13. “CHEEF” What we did? • Short of CHEEF project experiences • Marketing experiences • Financing management • Financing risk control

  14. “CHEEF” What we did? • Confronting challenges and seeking measures for improvement • Organizing professional trainings • Optimizing operation procedure • Establishing and improving the internal regulation and information system • Formulating special internal incentive policies • Establishing cooperative platform for CHEEF project • Financing package

  15. “CHEEF” What we did? • Changes • Efficient implementation stage (2011): Four projects and total on-lending amount up to $ 31.9 million UNIT:10,000 USD

  16. What we will do next? • Continuing to actively promote CHEEF project throughout the bank • Creating financial products and supporting for energy saving service industry

  17. What we will do next? • Continuing to actively promote CHEEF project throughout the bank • Aim • Huaxia will realize the transformation from the green on-lending implementation bank to the green lending professional bank, and develop green lending business into a real brand.

  18. What we will do next? • Creating financial products and strengthening support for energy saving service industry • EPC project • Carbon trading financing

  19. Thanks & Regards

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