II. Introduction to ADB Project
(1) Background
The Shannxi Accelerated Energy Efficiency and Environment Improvement Financing Project (hereinafter referred to as the “ADB Loan Project”) is a national sovereign US dollar loan applied by Shaanxi Financial Holding Group (hereinafter referred to as “SFHG”) from the National Development and Reform Commission, the Ministry of Finance of the P.R.C. and Asian Development Bank, with the direct support and guidance of Shaanxi Development and Reform Commission and Shaanxi Provincial Finance Department (SFD), to support the subprojects in the field of energy efficiency and environment improvement in Shaanxi Province. The Project applied for an ADB loan of $150 million.
The ADB Loan Project employs an innovative approach of the “Financial Intermediation Loan (FIL)” as its mode of operation. Under this mode, SFD and Shaanxi Development and Reform Commission are responsible for the guidance, supervision and approval of the Project during the implementation stage; SFHG, as the final borrower and executing agency of the ADB Project, is responsible for the overall supervision, management and coordination of the Project; SFHG Development & Investment Management Company (hereinafter referred to as “SDIMC”), a wholly-owned subsidiary of SFHG, as the project implementation agency, is responsible for the specific operation and management of the Project. The Project focuses on the energy-saving and emission reduction industry, with emphasis on supporting energy-saving and emission reduction projects of small and medium-sized enterprises and large enterprises with greater energy-saving and carbon-reduction effects, as well as clean technology projects.
(2) Features
I. The investment and financing mode is optimized to improve the efficiency of fund use. The Project employs an innovative approach of the “government + platform + financing + third-party service institutions” as its organization mode, and the “refinancing + guarantee + leasing” as its financial mode, to support clean energy development and utilization in Shaanxi Province, enhance the technology level of traditional industries, and improve the efficiency of energy use through the “attraction of investment and talents”.
II. A highly market-oriented operation mode is adopted, and the loan funds are used in a more flexible manner. The ADB Loan Project is implemented by SFHG as the project executing agency, which is mainly responsible for the overall operation, decision-making and supervision of the project implementation process. The selection of loan amount, maturity and interest rate for the subprojects are screened and determined by SFHG in accordance with market-oriented principles, thus ensuring and taking into account the green benefits, social benefits and economic benefits of the Project.
III. It promotes the establishment of a new mechanism of green financial platform for energy conservation and environmental protection. The 13th Five-Year Plan of Shaanxi Province clearly proposes to establish a green financial service platform in Shaanxi based on SFHG, which regards the ADB Loan Project as a basis and starting point to improve the ability of enterprises for green projects financing through the use of various financial instruments and means such as guarantees and financial leasing, and to provide comprehensive services of green projects for project enterprises.
IV. A professional management and implementation team for the national sovereign loan project was initially set up. Since the implementation of the Project, SFHG has actively established communication and liaison mechanisms with ADB experts in financial, legal, environmental and social fields, invited experts in various fields to provide staff training and long-term intellectual supports for the smooth implementation of the ADB Loan Project, and gradually established a professional team for the management and implementation of the national sovereign loan project through capacity building, talent introduction and cooperation with external professional institutions.
III. Implementation Effects of ADB Project
By the end of December, 2021, SFHG Development & Investment Management Company (SDIMC) had invested in 10 subprojects with a loan amount of $149.7 million, as the first loan disbursement of the ADB Project. 9 of the 10 subprojects included 6 of geothermal heating and cooling, 2 of LED lighting and 1 of green building development, falling in the categories of clean energy encouraged and supported by the governments. By 2022, 8 subprojects had been put into operation, and 1 had been in construction.
By the end of December, 2021, the ADB Project had cumulatively saved 199,000 tons of standard coal, and reduced 550,000 tons of CO2. It is estimated that, the cumulative standard coal and CO2 will decrease by 331,000 tons and 919,000 tons respectively by the end of 2023. Through the ADB Project, SFHG has mobilized more social funds to finance the energy-saving and emission-reduction subprojects in Shaanxi Province, and has recycled loan funds to support the development of high-quality enterprises in energy-saving and emission-reduction of the province. As of now, the ADB Project has cumulatively absorbed and invested RMB5.93 billion.
IV. Awards
(1) Best Performing Project Award in 2021
The Shannxi Accelerated Energy Efficiency and Environment Improvement Financing Project received the Best Performing Project Award in 2021 from the Ministry of Finance of the P.R.C. and the Asian Development Bank (ADB). Starting from the year of 2013, the ADB loan projects implemented by the P.R.C. need to be evaluated and selected once every two years, and the year 2021 is its fifth year. This award is to recognize the projects with strict compliance with loan covenants, timely start-up and implementation, smooth disbursement and procurement, and satisfactory intended project outputs.
Photo: Shaanxi Energy Efficiency Improvement and Environmental Promotion Project won the award certificate
and medal of the Asian Development Bank's best Performance Project in 2021
(2) Shannxi ADB Project was collected in the Casebook of Multiple Loan and Bilateral Loan Projects by the Ministry of Finance as one of 35 excellent cases.
The Casebook of Multiple Loan and Bilateral Loan Projects (ISBN: 978-7-5218-33) compiled by the Department of International Financial Cooperation of the Ministry of Finance of the P.R.C., published in June 2022, provides a useful reference for the planning and implementation of loan projects by competent authorities at all levels and project units by selecting 35 representative project cases from multiple loan and bilateral loan projects implemented in the P.R.C. since 2000, and by sorting out experience and practice and innovative measures from multiple loan and bilateral loan projects implemented in the P.R.C. in recent years. The Shannxi Accelerated Energy Efficiency and Environment Improvement Financing Project, as one of 35 excellent cases, was collected in the Casebook.
V. Investigation and Research
1. On August 16, 2019, Vice-President Mr. Diwakar Gupta of Asian Development Bank (ADB) along with other related staff paid a visit to Xi’an to investigate and visit the Comprehensive Energy Station Project in Central Economic Park in Fengxi New City, and to have a discussion with Shaanxi Provincial Finance Department (SFD), Shaanxi Financial Holding Group (SFHG) and Fengxi New City on the implementation of ADB-backed Shannxi Accelerated Energy Efficiency and Environment Improvement Financing Project and further cooperation.
Photo:The Vice President of ADB had a discussion with the Shaanxi Department of Finance, Shaanxi Financial Holding Group and Fengxi New City
Photo: Vice President of ADB visits and investigates the project of Fengxi New City Headquarters Economic Park
2. On December 2, 2019, President Mr. Takehiko Nakao of Asian Development Bank (ADB) along with the delegation came to Fengxi New City to investigate and inspect the projects in which SFHG invested, visited the Comprehensive Energy Station Project in Central Economic Park, the Sponge City Exhibition Hall and the No. 3 Energy Station of Western China Science & Technology Innovation Harbor Wisdom Uni-Town to learn more about the planning, project construction overview and actual operation of Fengxi New City, highly appreciated the green development concept and achievements of the cooperation project, and expressed his hope for further cooperation with win-win result.
Photo: President of Asian Development Bank, and his delegation came to Fengxi New City to investigate
the investment projects of the SFHG
6 Summary of Subproject Financed
No.
|
Name of Subproject |
Photo of Subprojet |
The project is located in the northwest area of Fengxi New Town, Xi'an City, Xi Xian New District, Fengrun Heyuan and other residential areas. The project has 100 designed hot dry rock holes, drilling depth of about 2500 meters, a total of 9 machine rooms, each machine room uses 3 dry hot rock units, heating for about 1.53 million m2 civil buildings.A01 |
Non-interfering Geothermal Heating Pump Subproject in Fengxi New City (Phase 2)
|
 
|
The project is located in Airport New City, Xi Xian New Area, involving Fengjing Avenue, the east section of Airport South Ring Road and other road areas. The project is the construction of LED lighting street lights in the Airport New City area, including the LED green lighting project in 12 sections including the Fifth Avenue.A02 |
LED Street Lighting Construction Project in Airport New City
|
|
The project is located in the middle of Qinhan New Town in Xi Xian New Area near Weihe River, Qinhan Avenue, Zhengyang Bridge and other roads. The project is for the construction of LED street lights in the Qinhan New City area, specifically for the construction of LED lighting projects on 24 roads such as Tianhan Avenue and Zhougong Avenue in the Qinhan New City.A03 |
LED Street Lighting Construction Project in Qinhan New City |
|
The project is located in the northern area of Fengxi New Town, Xi Xian New Area, at the intersection area of Shangye North Road and Tongde Road and the Second Affiliated Hospital of Shaanxi, west of Baima River Road. The project uses non-interference geothermal technology to provide cold, hot and domestic hot water and steam services for Fengxi New Town Fengrun area and headquarters Economic Park area, with a total energy supply area of 850,000 square meters.A04 |
Comprehensive Energy Station Project in Fengxi New City |
|
The project is located in the area of Science and Technology Innovation Port in western China to build 6 comprehensive energy supply stations, combining the middle and deep ground source heat pump unit with cooling tower and centrifugal chiller, and providing mulined heating and cooling for the innovation port area through gas boiler peak regulation.A05ti-energy comb |
Comprehensive Energy Project of Western China Science & Technology Innovation Harbor Wisdom Uni-Town |
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The project is located in the middle of Fengdong New Town and the north of Doumen Reservoir in Xi 'an Xian New Area, Xi' an. The project is to build 6 geothermal Wells of 2500 meters deep, and 3 water source heat pump units with a heat production capacity of 2549kW, to provide heating and domestic hot water for the Huguang Mountain (Phase I) communityA06 |
Non-interfering Geothermal Heating Project for Laker Mountain Landscape (Phase 1) |
|
The project is located in the east of Xianyu Road in the west of Fengxi New Town, near Fenghe Area, and Nanyang Dongyuan Residential Community. The project is to build the middle and deep non-interference geothermal energy heating system, including 15 ground source heat pumps, 42 heat extraction holes, etc. The drilling depth is about 2,500 meters, providing heating services for Nanyang East Courtyard, with a heating area of about 580,000 square metersA07 |
Heating Project of Nanyang Dongyuan, Affiliated Residence of Science and Education Section of Science and Technology Innovation Port in Western China |
|
The project is located in the west area of Fengdong New Town, Xixian New Area, near Kunming Fourth Road, and the residence in Area B of Fengbinshui Town. The project is to build 9 geothermal Wells (well depth of about 2500 meters) and 3 heat producing 2100kW water source heat pump units, to provide heating services for Zone B of Fengbinshui Town.A08 |
Non-interfering Geothermal Heating for District B of Fengbin Shuizhen |
|
The project is located in the north of Xi'an High-tech Zone, west of Yunshui Second Road, east of Yunshui Third Road and north of Tiangu Fourth Road. The construction contents of the project mainly include curtain wall engineering, energy-saving elevator and control system, rainwater recovery system, energy-saving lamps, cold and heat source transmission and distribution system, frequency conversion pump engineering, commercial concrete engineering, ready-mixed mortar engineering, etc.A09 |
Tiangu Yashe Accelerated Building Energy Efficiency and Environment Improvement Subproject |
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B01 |
Tiandiyuan Tangyuefang Accelerated Building Energy Efficiency and Environment Improvement Subproject |
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B02 |
Accelerated Energy Efficiency and Environment Improvement Subproject inZimao Lanwan Zone I Industrial Park of Airport New City of Xixian New Area |
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