The policy environment in China isconducive to green energy financing.The policy environmentin China is conducive to green energy financing.TheGovernment of China (GoC) is undertaking one of the mostaggressive energy efficiency (EE) and renewable energy (RE)campaigns in the world.For the 13th FYP (2016–2020), the GoCplans to adopt a total energyconsumption cap and a coalconsumption cap, in addition to 15 percent energy intensityreduction target. China currently has the world’s largestinstalled RE capacity, with 130 gigawatts (GW) of wind and43 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 by2020 and 20 percent by 2030. This study aims to provideinputs to the Chinese government’s envisioned Green Fund.Since the closure of the energy efficiency rewards funds inearly 2015, the NationalDevelopment and Reform Commission(NDRC) Environmental Protection and Resource ConservationDepartment is interested in setting up an energy efficiencyfund with government budget to maximize its leverage ofcommercial financing for energy efficiency investments.Themarket demand for green energy financing is huge for the13th FYP.The lion’s share of the green energy investmentsneeds will come from commercial financing. However, thebanking sector’s uptake of green financing remains lowrelative to the huge investment needs, and many EE/REenterprises continue to face difficulties inaccess tofinancing. International and domestic experiences offer awealth of experience and lessons learned. This studyreviewed a wide range of green energy financing mechanismsfrom internationalexperience, including credit lines, riskguarantees, green funds, green banks, utility demandsidemanagement (DSM) funds, utility on-bill financing, ESCOfinancing and leasing, etc.The study found that a GreenEnergy Fund, with a dedicated team and mandate to investinthe green energy market, has a higher chance to overcomethe above mentioned barriers to increase financing flow tothe targeted market and underserved clients, and also has ahighleverage of public funds. The study also found thatgenerating sufficient deal flows is a major challenge togreen energy financing mechanisms. This study also examinedin details on international experience of setting up a greenenergy fund.This study also reviewed Chinese experience ingovernment funds, with the intent to learn thestructure,financing instruments, and lessons from existing governmentfunds in China. Most of the existing government funds aim topromote new technologies, and very few are targeted at greenenergy market to date. This study also reviewed relevantlaws, policies and regulations issued by central governmentagencies. This study conducted preliminary design of apotential Green Energy and Emission Reduction Fund: Thepreliminary design includes strategic focus, targetedmarket, financingsources, fund structure, fund scale andleveraging ratio, financial products, eligibilitycriteria,and exit strategy.
PDF
download
878987797
028-85220240
