China Encourages Investment to Clean Water
by China Water Risk 8 December, 2014
NDRC and the Ministry of Finance plan to set up a RMB50 bn National Environmental Fund, to provide loans with zero or low interest rate with priority given to: 1) factories using third-party treatment services and 2) environment-related enterprises.
It seems that the central government is serious about clean up the pollution. Indeed, over the last few months, various government bodies including the State Council, NDRC and related ministries have issued policies to call for more stringent environmental monitoring and regulations and also encourage public–private partnership to mobilize social investment into clean-up.
To encourage public–private partnership projects
26 Nov 2014, the State Council issued Guidance on Encouraging Social Investment with Investment and Financing Mechanism in Key Sectors, aiming to fully mobilize social investment, maintaining the pivotal role of investment in stabilizing economic growth.
According to the guidance, the government will promote public-private partnerships, and provide financial incentives such as subsidies and subsidized loans for investors, to facilitate easier market access to seven specified sectors, including:
- Ecological & environmental protection
- Agriculture & water conservancy projects
- Clean energy
- Infrastructure & grid construction for telecommunications, power, oil & gas
- Natural resource protection including oil, gas & mineral reserves
- Health care & elderly care services
Meanwhile, the government will also innovate credit services, deepen rural finance reforms, encourage the development of equity investment funds and venture capital funds.
In addition, both NDRC and Ministry of Finance have issued detailed guidelines for the development of public–private partnership projects and guide on the project operation:
- Ministry of Finance – Guide on Operation of Public–Private Partnership Projects: issued on 29 Nov 2014
- Ministry of Finance – List of Public–Private Partnership Demonstration Projects: issued on 30 Nov 2014; in total 30 projects, amounts to RMB180 billion
- NDRC – Guidelines on Development of Public–Private Partnership Projects: issued on 2 Dec 2014; including appendixes on guide on generic contract and monthly progress reporting system
Call for better environmental monitoring & law enforcement
27 Nov 2014, the State Council issued Circular on Strengthening Environmental Monitoring and Law Enforcement, urging local governments and environmental authorities to act with “zero tolerance towards pollution violations”.
Ultimately, the State Council also wants to promote circular economy, starting from national economic & technological development zones, as per its Opinions on Transform, Upgrading and Innovation Development of National Economic and Technological Development Zones issued on 21 Nov 2014.
Please click below to read more on investment to clean up water and new fines to prevent & control pollution.