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The second phase of the China Energy Conservation Project was officially launched yesterday in Beijing, aimed at promoting the industrialization of energy management, a market-orientated energy-saving mechanism.

The project, which started in 1997, is jointly organized and implemented by the Chinese Government, the World Bank (WB) and the Global Environment Facility (GEF).

 

"The project aims at improving energy efficiency, reducing greenhouse gases and other pollutant emissions through demonstration and the promotion of energy management companies (EMCs)," said Wang Shumao, executive director of the project's management office.

 

The second-phase project, which will run to 2010, aims to achieve an annual energy saving of more than 3 million tons of standard coal and an annual reduction of carbon dioxide emissions of at least 2 million tons, Wang introduced.

 

Establishment of an EMC loan guarantee program will be one of the major tasks for the second phase of the project.

 

GEF grants of US$26 million will be used in helping newly-established EMCs to obtain commercial loans for building of energy efficiency projects.

 

The guarantee program will help EMCs build up sound credit records at commercial banks, which will then solve their financing problems.

 

By the year 2010, financing volume of the EMCs through the loan guarantee program is expected to top 3 billion yuan (US$362 million).

 

The other task is to establish an EMC association to provide training and technical support for new and potential EMCs.

 

Three pilot EMCs, with a total investment of 600 million yuan (US$72.5 million), were established during the first-phase of the project.

 

The three firms have signed 283 energy management contracts and realized 820 million yuan (US$99 million) in energy-saving benefits from implementation of the contracts.

 

"The project is significant, since it is urgent for China to develop energy-saving programs, due to the increasing pressure on energy supplies and environmental protection caused by rising energy demands throughout the country,'' said Wang.

 

(China Daily November 14, 2003)