Green Credit policy announced

New guidelines on energy conservation and pollution affecting the banking industry in China were announced on 13 February 2008.

The two new sets of guidelines¹ require all banking institutions to work alongside the environmental protection department to enforce the government's environmental policies. This has led to some institutions adopting strict measures, no longer granting loans to projects penalised by the government guidelines.

The ICBC has also released a report² calling on banks to restrict or turn down loan applications from projects which do not comply with the government's strict environmental policies. Projects marked as ‘restricted' will not receive loans until these comply with regulations so restrictions can be lifted.

The China Development Bank offers full support to projects such as water pollution rehabilitation projects that comply with guidelines. As a result, the bank has seen a 35.6% annual growth in these loans.

¹ the "Circular for Preventing and Controlling the Credit Risk of Energy and Pollution Intensive Industries" and the "Guiding Opinions for Energy Saving and Discharge Reduction Credit Granting Works"

² "Opinions for Propelling the Construction of Green Loaning"