SHANGHAI • China and the Asia Development Bank (ADB) have launched a green financing platform to support efforts by small and medium-sized enterprises (SMEs) to cut pollution in the smog-hit Beijing-Tianjin-Hebei region, ADB said yesterday.
The area, home to six of China's 10 smoggiest cities in the first quarter of this year, has promised to upgrade or shut vast swathes of polluting industry as it tries to meet air quality targets for this year.
But financing the transition to cleaner energy has proved one of its biggest challenges, especially in the poorer rural region of Hebei, where the switch from coal to natural gas is expected to cost at least 300 billion yuan (S$61 billion) between 2016 and 2020.
The financing platform was launched by ADB, the China National Investment and Guaranty Corporation, the State Development and Investment Corporation, China's Finance Ministry and the National Development and Reform Commission.
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ADB late last year approved a loan of €458 million (S$708 million) for the platform, which it says will leverage €3.6 billion in domestic commercial financing.
According to Hebei delegates attending an annual session of Parliament in March, the government is expected to provide only around 10 to 15 per cent of the 3 to 4 trillion yuan of green investment that China needs every year over the next five years.
China began to develop green financing in 2007 and more than 8 trillion yuan in "green credit", used to finance clean projects, has been issued.