OREANDA-NEWS. September 17, 2012. Since January this year, ICBC scores good result by moving on its "green credit" and using leveraged lending to support the companies engaged in energy-saving or emission reduction and China's economic restructuring. ICBC has disbursed RMB 601.6 billion in loans to green sector up to first half of this year. These ICBC loans have supported a large batch of projects involved in ecological, history and culture conversation, clean energy utilization, energy-saving/emission reduction, and resource utilization, reported the press-centre of ICBC. 

ICBC was the earliest commercial bank in the country to advocate "green credit" and put it into practice as well. When extending credit to eco companies, ICBC has a strict policy of "one-vote veto" to check and approve loans. Under the "one-vote veto" rule, loans are totally restricted to enterprises that fail to meet the eco standards regardless of how well they perform financially. By end of first half of 2012, in all domestic branches, over 99.9% corporate customers were companies which are eco-friendly or reach the eco standards, over 99.9% corporate loans went to these companies. The remaining less than 0.1% of the loans were granted to companies in the process of getting eco-certification. ICBC has avoided granting credit to projects or companies that in anyway contravene national environmental laws.

During the first six months of 2012, ICBC extended more loans to "green" companies, companies that consume less energy, produce less pollution, key national energy saving projects (ESP), key projects that protect the environment, technological restructuring or upgrade projects that use advanced eco-technology. The first priority was the customers engaged in green projects related to new energy, energy saving and resource utilization, a shift in the focus of lending policy towards carbon emission and energy saving sector. As of end of June, 2012, among all ICBC loans to green projects, RMB 127.7 billion went to ecological, history and culture conservation, RMB 217 billion to clean energy utilization, RMB 161.8 billion to energy-saving or emission reduction, RMB 95.1 billion to resource utilization. All these loans provide strong financial support to the green economy.

Meanwhile, ICBC also spent efforts on innovation in a bid to launch "green" financial products and services, such as carbon factoring, energy-efficient loans targeted at companies in emerging green sectors (conserving energy, circular economy). Electronic banking, online loans are examples of low-carbon, "green" financial services that conserve energy, reduce emission, aiming to be an eco-friendly "Green Bank".

China's green credit market has huge potential and good prospect, said an executive with ICBC. An example is Shanxi, a province laden with coal. ICBC provided loans to Shanxi Zhongdian Mingxiu Electric Power Company Limited for its gas generator project, a coal gas project under national "Clean Development Mechanism". The project uses gas + steam to generate electricity. The coal mine methane will be recycled to reduce emission. Once the power plant is in operation, every year can reduce carbon dioxide emissions by nearly 4 million tons. Significant result in saving energy and reducing emission when compared to electric generation by coal, nearly 400,000 tons of coal can be saved, reducing clinker and dust emission by approximately 140,000 tons. Further, the new power plant has an annual power capacity of 850 million kw/h, bringing a sales revenue of RMB 830 million every year, of which, RMB 280 million to China Clean Development Mechanism Fund.

If clean energy is a successful case of energy-saving, emission reduction through ICBC loan to support conventional industries, then loans to circular economic parks demonstrate ICBC's active support to address the conflict between resources and environment through resource utilization and efficiency improvement. Nowadays, circular economic parks are one main option for the regions to change the growth pattern, restructure economy and resolve the conflict between resources and environment.

The Quangang Petrochemical Industrial Park in Fujian's Quanzhou is a national "circular economy demonstration pilot park". The Park covers an area of nearly 10 square kilometers focusing on three types of projects - petrochemical recycling industry chain, clean energy industry chain and utility island, a highly efficient resource utilization and recycling base. Phase 1 of thermal gas project in the Park, once in production, will supply 2,624,000 tons of gas every year. Dust emission from small boilers in companies and sulphur dioxide emission can be reduced by 7,939 tons and 6,500 tons respectively. 100,000 tons of coal can be saved.

The recycling of exhaust gas produces 60,000 tons of liquefied carbon dioxide and cut carbon dioxide emissions by at least 200,000 tons per year. Under the resource recycling technology project, 3600 tons of waste are turned into 3300 tons of packaging cloth every year, equivalent to a saving of 6 tons of petroleum and 50 tons of water needed for dyeing, reduce emission of 50 tons of dyeing wastewater, 48 kilograms of sulphur dioxide and 60 kilograms of dust, reduce consumption of 4 tons of steam, 2 tons of coal and 288 kilograms of furnace cinder. The result in conserving energy and reducing emission is significant.

In the next step, ICBC will continue providing "green loans" to companies in emerging sectors, and contribute to the transformation of the economic growth pattern, conserve energy and reduce emission, said an executive with the Bank.