World Bank's IFC to Back China's Clean Coal Plants

World Bank's IFC to Back China's Clean Coal Plants

PlanetArk

25th May 2004

WASHINGTON - The World Bank's private-sector arm is preparing the groundwork to invest in a number of power plants in China, from hydro-electric to clean coal facilities, International Finance Corp. executive vice president Lars Thunell said on Wednesday.

"Given the (energy) configuration they have, I think hydro has been important and will continue to be important. I think clean coal technology is obviously something that is going to be important and I know that we are working on a number of deals in that area," Thunell told Reuters after a trip to China, which is the world's No.2 electricity consumer, ranking only behind the United States.

The IFC has invested about US$2.4 billion in more than 100 projects in China. About a third of the IFC's investment in China has gone into the country's financial sector. It has tripled its investment in China in the past three years and it plans to boost the amount by US$1 billion in the next three.

"There's a tremendous amount of activity going on in all the coastal cities, but I think where the Chinese government wants to open up right now is more in the rural areas and in the western part of China," Thunell added.

Some 500 million Chinese, many in rural areas and some of the more remote parts of the country, live on less than US$2 a day, he said.

During his trip, Thunell signed an agreement to lend US$22 million for three hydro power plants in China's southwestern Yunnan province, which borders Myanmar and Laos.

He also signed a US$45 million loan agreement, accounting for 60 percent of a renewable resource project.

"The other focus they have is, obviously, infrastructure," Thunell said. "They have a tremendous need for power and they are focusing very much on the environmental issues and energy efficiency. They have some goals for increasing energy efficiency significantly."

In addition to energy projects, the IFC explored investments in China's financial services sector. The IFC already has investments in six Chinese banks, most along the affluent coastline region in the East. These projects would be more specialized in nature, ranging from asset management to issuing securities, he said.

Story by Gilbert Le Gras