The European Investment Bank (EIB) granted a EUR 500 million ($891.1 million) loan to China for projects supporting climate change mitigation.

EIB Vice-President Magdalena álvarez Arza said: "the EIB is renewing its support for China in its fight against climate change. This operation ranks among the EIB's most efficient loans in terms of GHG emissions reduction."

It is estimated that up to 3 million tons of CO2 will be saved every year with its first Climate Change Framework Loan. álvarez Arza added: "this new loan is coming at an opportune time, when the whole world is gathering in Cancún to reach an agreement on Climate Change actions."

The Climate Change Framework Loan II (CCFLII) was signed by álvarez Arza and Chinese Vice-Minister of Finance Li Yong. It will be a multi-investment scheme under which the Bank could support several individual Climate Change mitigating projects contributing to the avoidance or reduction of greenhouse gas emissions.

Projects will be selected in particular on the criteria that they will be making more and better use of renewable energy sources and enhancing energy efficiency. Some schemes may have the possibility of generating carbon credits. The schemes will be located in different provinces in China.

The project will contribute to the EU-China strategic partnership and cooperation with China in the area of climate change: fostering the efficient use of energy, the development of renewable energy, and the associated avoidance of GHG emissions included in China's National Climate Change Program.

The proposed operation is the second of its kind in China ?(the first one being the EUR 500 million China Climate Change Framework Loan, CCCFL, signed in November 2007, which has been successfully promoted by the Chinese government). As of today, more than 80 percent of the framework loan has been approved under the CCCFL.

Based on the successful and efficient allocation of the CCCFL, the Chinese government requested the Bank to renew its commitment to contributing to China's efforts to address Climate Change issues.

The CCCFL II will pursue similar objectives to the previous framework loan, and project schemes will be identified and pre-selected by China‘s National Development and Reform Commission and the Ministry of Finance.

The EIB will select individual schemes and perform due diligence to ensure that all projects are economically and financially viable, technically adequate and in compliance with the Bank's environmental and social requirements. The framework loan will be made up of a maximum of 15 projects in the following sectors: renewable energy based on onshore wind, biomass, solar (thermal and photovoltaic), geothermal and small hydro; improvement of energy efficiency and reduction of GHG emissions on industrial sites; district heating contributing to EE and the use of RE.