IFC, a member of the World Bank Group, has put together a $300 million financing package for China Gas Holdings Ltd. (“China Gas”) to help expand the supply of cheaper and cleaner energy to millions of Chinese households, with the aim of improving their living conditions and reducing respiratory illnesses.
IFC will provide an $86 million loan from its own account and $64 million from the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio. The package also includes a $150 million syndicated loan from 19 commercial financial institutions, which was underwritten by The Royal Bank of Scotland plc (“RBS”).
The financing is intended to support China Gas’ expansion of city gas distribution infrastructure and the building of new natural gas refilling stations. Switching to gas will help reduce the use of polluting coal and other fuels that are more carbon intensive for industrial, household, and road transportation use, thus improving the environment for people living in crowded cities.
China’s strong economic growth in recent decades has lifted millions of people out of poverty but also created environmental challenges, including air pollution.
The investment is part of IFC’s strategic focus on natural gas as an economical and environmentally friendly fuel that offers an opportunity to improve access to reliable energy while reducing pollution and lowering greenhouse-gas emissions.