Developing an Innovative Energy Efficiency Financing Mechanism in China
The policy environment in China is conducive to green energy financing.The policy environment in China is conducive to green energy financing. TheGovernment of China (GoC) is undertaking one of the most aggressive energy efficiency (EE) and renewab...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/993791497425724347/China-Developing-an-innovative-energy-efficiency-financing-mechanism-in-China http://hdl.handle.net/10986/27463 |
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okr-10986-274632021-05-25T09:00:57Z Developing an Innovative Energy Efficiency Financing Mechanism in China World Bank GREEN ENERGY ENVIRONMENTAL POLICY GREEN FINANCE GREEN FUND GREENHOUSE GAS EMISSIONS The policy environment in China is conducive to green energy financing.The policy environment in China is conducive to green energy financing. TheGovernment of China (GoC) is undertaking one of the most aggressive energy efficiency (EE) and renewable energy (RE) campaigns in the world.For the 13th FYP (2016–2020), the GoC plans to adopt a total energyconsumption cap and a coal consumption cap, in addition to 15 percent energy intensity reduction target. China currently has the world’s largest installed RE capacity, with 130 gigawatts (GW) of wind and 43 GW of solar photo voltaic (PV) by the end of 2015. REcurrently accounts for 11 percent of total primary energy; and the GoC plans for non-fossilfuel to reach 15 percent by 2020 and 20 percent by 2030. This study aims to provide inputs to the Chinese government’s envisioned Green Fund. Since the closure of the energy efficiency rewards funds in early 2015, the NationalDevelopment and Reform Commission (NDRC) Environmental Protection and Resource Conservation Department is interested in setting up an energy efficiency fund with government budget to maximize its leverage of commercial financing for energy efficiency investments.The market demand for green energy financing is huge for the 13th FYP.The lion’s share of the green energy investments needs will come from commercial financing. However, the banking sector’s uptake of green financing remains low relative to the huge investment needs, and many EE/RE enterprises continue to face difficulties inaccess to financing. International and domestic experiences offer a wealth of experience and lessons learned. This study reviewed a wide range of green energy financing mechanisms from internationalexperience, including credit lines, risk guarantees, green funds, green banks, utility demandside management (DSM) funds, utility on-bill financing, ESCO financing and leasing, etc.The study found that a Green Energy Fund, with a dedicated team and mandate to invest inthe green energy market, has a higher chance to overcome the above mentioned barriers to increase financing flow to the targeted market and underserved clients, and also has a highleverage of public funds. The study also found that generating sufficient deal flows is a major challenge to green energy financing mechanisms. This study also examined in details on international experience of setting up a green energy fund.This study also reviewed Chinese experience in government funds, with the intent to learn thestructure, financing instruments, and lessons from existing government funds in China. Most of the existing government funds aim to promote new technologies, and very few are targeted at green energy market to date. This study also reviewed relevant laws, policies and regulations issued by central government agencies. This study conducted preliminary design of a potential Green Energy and Emission Reduction Fund: The preliminary design includes strategic focus, targeted market, financingsources, fund structure, fund scale and leveraging ratio, financial products, eligibility criteria,and exit strategy. 2017-06-28T22:17:17Z 2017-06-28T22:17:17Z 2016-06 Working Paper http://documents.worldbank.org/curated/en/993791497425724347/China-Developing-an-innovative-energy-efficiency-financing-mechanism-in-China http://hdl.handle.net/10986/27463 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: ESMAP Paper Publications & Research East Asia and Pacific China |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
GREEN ENERGY ENVIRONMENTAL POLICY GREEN FINANCE GREEN FUND GREENHOUSE GAS EMISSIONS |
| spellingShingle |
GREEN ENERGY ENVIRONMENTAL POLICY GREEN FINANCE GREEN FUND GREENHOUSE GAS EMISSIONS World Bank Developing an Innovative Energy Efficiency Financing Mechanism in China |
| geographic_facet |
East Asia and Pacific China |
| description |
The policy environment in China is
conducive to green energy financing.The policy environment
in China is conducive to green energy financing.
TheGovernment of China (GoC) is undertaking one of the most
aggressive energy efficiency (EE) and renewable energy (RE)
campaigns in the world.For the 13th FYP (2016–2020), the GoC
plans to adopt a total energyconsumption cap and a coal
consumption cap, in addition to 15 percent energy intensity
reduction target. China currently has the world’s largest
installed RE capacity, with 130 gigawatts (GW) of wind and
43 GW of solar photo voltaic (PV) by the end of 2015.
REcurrently accounts for 11 percent of total primary energy;
and the GoC plans for non-fossilfuel to reach 15 percent by
2020 and 20 percent by 2030. This study aims to provide
inputs to the Chinese government’s envisioned Green Fund.
Since the closure of the energy efficiency rewards funds in
early 2015, the NationalDevelopment and Reform Commission
(NDRC) Environmental Protection and Resource Conservation
Department is interested in setting up an energy efficiency
fund with government budget to maximize its leverage of
commercial financing for energy efficiency investments.The
market demand for green energy financing is huge for the
13th FYP.The lion’s share of the green energy investments
needs will come from commercial financing. However, the
banking sector’s uptake of green financing remains low
relative to the huge investment needs, and many EE/RE
enterprises continue to face difficulties inaccess to
financing. International and domestic experiences offer a
wealth of experience and lessons learned. This study
reviewed a wide range of green energy financing mechanisms
from internationalexperience, including credit lines, risk
guarantees, green funds, green banks, utility demandside
management (DSM) funds, utility on-bill financing, ESCO
financing and leasing, etc.The study found that a Green
Energy Fund, with a dedicated team and mandate to invest
inthe green energy market, has a higher chance to overcome
the above mentioned barriers to increase financing flow to
the targeted market and underserved clients, and also has a
highleverage of public funds. The study also found that
generating sufficient deal flows is a major challenge to
green energy financing mechanisms. This study also examined
in details on international experience of setting up a green
energy fund.This study also reviewed Chinese experience in
government funds, with the intent to learn thestructure,
financing instruments, and lessons from existing government
funds in China. Most of the existing government funds aim to
promote new technologies, and very few are targeted at green
energy market to date. This study also reviewed relevant
laws, policies and regulations issued by central government
agencies. This study conducted preliminary design of a
potential Green Energy and Emission Reduction Fund: The
preliminary design includes strategic focus, targeted
market, financingsources, fund structure, fund scale and
leveraging ratio, financial products, eligibility
criteria,and exit strategy. |
| format |
Working Paper |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Developing an Innovative Energy Efficiency Financing Mechanism in China |
| title_short |
Developing an Innovative Energy Efficiency Financing Mechanism in China |
| title_full |
Developing an Innovative Energy Efficiency Financing Mechanism in China |
| title_fullStr |
Developing an Innovative Energy Efficiency Financing Mechanism in China |
| title_full_unstemmed |
Developing an Innovative Energy Efficiency Financing Mechanism in China |
| title_sort |
developing an innovative energy efficiency financing mechanism in china |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/993791497425724347/China-Developing-an-innovative-energy-efficiency-financing-mechanism-in-China http://hdl.handle.net/10986/27463 |
| _version_ |
1764464618183327744 |