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ADB to Fund Green Finance Development in Hebei through Bank of Xingtai

ADB to Fund Green Finance Development in Hebei through Bank of Xingtai


MANILA, PHILIPPINES: The Asian Development Bank (ADB) has approved a $198.51 million equivalent loan to fund green finance development in Hebei province, the People’s Republic of China (PRC). The loan will be provided via the provincial and city governments to the Bank of Xingtai, a provincial commercial bank in Hebei, to finance subprojects that meet national and international green finance standards.

“Worsening environmental conditions are making Hebei province and many regions of the country less livable, with the poor suffering the most,” says ADB Senior Financial Sector Specialist Anqian Huang. “ADB’s participation will add substantial value to the Bank of Xingtai’s efforts to become a green finance institution, and also serve as a green finance business model for other city and rural commercial banks in the PRC to replicate. It will therefore further the government’s efforts to expand green finance in the country and, ultimately, contribute to better regional and global environmental outcomes.”

Hebei province is one of the PRC’s industrial hubs and a heartland for steel, petrochemicals, cement, glass, and leather. As a result, Hebei also is one of the country’s most polluted provinces. As of 2018, the average annual mean concentration of particulate matter 2.5 micrometers or less in diameter (PM2.5) in the air of Hebei province was 60 micrograms per cubic meter (μg/m3), six times the World Health Organization acceptable level (10 μg/m3).

The Bank of Xingtai is committed to become a leading green bank. Although headquartered in Xingtai city, the bank’s reach extends across the province. It was chosen because of its established business relationships with polluting industries in and around the city, its improving financial and operational performance, and its firm commitment to transform itself into a green bank that focuses on sustainable lending.

The project will establish a green finance business line for the bank that is replicable by other banks; a green finance information technology system; and international best practice in such areas as green finance taxonomy, environment, social, and governance; and related institutional capacity development.

Potential subprojects include biomass power generation, biofuel production, waste-to-energy investment, plastic replacement (e.g., biodegradable material production), green buildings, and environment-friendly upgrades to relevant components of industrial production lines. The ADB funds are likely to contribute to a small portion of the total subproject costs but catalyze additional market finance.

Total cost of the project is $795.04 million, with $596.53 million in counterpart financing, including $198.51 million from the Bank of Xingtai, and the rest from private sector and commercial finance. The project is expected to be completed at the end of 2026. Of the total project cost, the climate mitigation costs are estimated at about $254.08 million. The resulting greenhouse gas emission reductions are projected to be 1,861,632 tons of carbon dioxide equivalent

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Anand Gupta Editor - EQ Int'l Media Network