OREANDA-NEWS. August 22, 2013. As the China-Myanmar gas pipeline began to supply natural gas to China on 28 July, this energy artery that has been the focus of world attention began to play a role. The China-Myanmar gas pipeline, which is 793 km long and crosses two Maday Island trenches, Rakhine Mountains, Irrawaddy [Ayeyarwaddy] River, Myitnge River, and other major rivers, is known as one of the most difficult projects in the world's pipeline construction history. It was built with joint investment from China, Myanmar, South Korea, and India, and financing by China Development Bank (CDB) supported the project.

A manager in charge of China National Petroleum Corporation said the China-Myanmar gas pipeline is a genuine "ecological project" and "green project" and has achieved a multilateral win-win outcome. The reason for this three-year-long multinational infrastructure project to be so highly appraised has everything to do with the high environmental impact assessment (EIA) standards for international projects. In recent years, as China's largest bank in external investment and financing cooperation, CDB has seen rapid growth in its international business and has played an important role in supporting the "going abroad" campaign of Chinese enterprises. During this process, CDB has adhered to the advocacy of "green credit". It has always taken the carrying capacity of resources and environment as an important principle and restriction boundary to tighten credit evaluation and strictly control environmental and social risks so as to promote a multilateral win-win outcome.

Over the years, CDB has advocated and adhered to the concepts of "sustainable development" and "green credit". China's first financial institution to join United Nations Global Compact, CDB took the initiative to join UNEP's Sustainable Financial Action Plan. As a member of UN Global Compact, CDB pays great attention to the basic principle of environmental protection in business development.

It set up an "Equator Principles" working group in February 2008, gradually applied the "Equator Principles" concept in its business development, and made its due contributions to sustainable development and social responsibility. As a representative of banking institutions, CDB fully participated in formulation of the Chinese financial regulatory authorities' "Green Credit Guidelines". Meanwhile, CDB has continually raised its own requirements in organization and management, policies and systems, process management, and environmental benefits management; prevented environmental and social risks; improved its own environmental and social performance; and optimized the credit structure and improved service levels.

CDB first tightened its credit evaluation system. Learning from the Ten Principles of UN Global Compact and other international guidelines, internally CDB established a complete set of systems for assessing the environmental and social impact of its international business. In borrower assessment, CDB regards corporate environment and safety accident risks as an important content of credit evaluation. In project policy risk assessment, CDB analyzes the environmental risks of construction projects and makes judgments on local legal compliance in accordance with the environmental protection policies in the project countries or regions. CDB's internal regulation stipulates that borrowers must obtain EIA documents issued by local governments prior to the signing of loan agreements, and no loans will be disbursed without such documents. Up to now, the EIA pass rate reaches 100% for CDB's overseas lending projects.

Local social benefits of its international projects are also an important component of CDB's credit evaluation system. Based on different business categories, CDB has established more detailed regulations on environmental and social risk analysis and assessment. In risks and returns evaluation, the key is to analyze corporate environmental protection responsibility and special social responsibility required of businesses by project countries or regions. Taking the chemical industry as an example, CDB requires key analysis and evaluation of project EIA approval authority, approval content, project waste treatment technology, local environmental capacity, and social benefits, etc. In addition, overseas lawyers' written opinion on EIA and other subjects is also a necessary condition for CDB's international cooperation project lending evaluation.

CDB attaches great importance to management and control of pre-lending and post-lending environmental risks for international projects. In customer credit rating, CDB takes as an important reference whether projects have obtained EIA approval. CDB will lower the credit ratings of customers who have been penalized for environmental issues. CDB will also carry out post-lending EIA risk monitoring. It will lower the asset quality level for enterprises that violate environmental laws and regulations or have caused major safety accidents, and will restrict or even suspend lending in especially serious cases.

In China, CDB is an active advocate and promoter of "green credit" and gives priority to offering financial support to environmental protection and energy conservation and emission reduction. In every year since 2007, CDB has formulated environmental protection and energy conservation and emission reduction work plans, systematic risk control systems and credit policies, focusing on water environment, atmospheric environment, and other key focus areas to promote lending in environment-friendly areas with good results. Just in 1Q13, CDB issued loans of 93.4 billion yuan in environmental protection and energy conservation and emission reduction, offering key support to the second phase of ecological restoration of Chaohu Lake, sewage treatment in Changsha, and promoting energy conservation and emission reduction in the thermal power sector. As of the end of June 2013, CDB has issued total loans of over 800 billion yuan in environmental protection and energy conservation and emission reduction and become one of the leading banks in environmental protection and energy conservation and emission reduction.

CDB Chairman Hu Huaibang said at CDB's recent 2Q13 work meeting that the next step would be to continue to support innovation with science and technology and energy conservation and environmental protection, implement a "green credit project", strictly control lending to industries with high pollution and high energy consumption and industries with excess production capacity as well as projects with backward production capacity, promote the steady healthy development of the economy, and achieve unity in CDB's political, economic, and social responsibilities.