The objective of the project is to strengthen the impact of CEXIM’s green loan portfolio by (i) enhancing CEXIM’s Environmental and Social Management System (ESMS) and (ii) development of a Green Financing Framework (GFF), through supporting its on-lending facility.
The project is to finance green subprojects in China by providing a non-sovereign-backed loan to China EXIM Bank (CEXIM).
AIIB’s Environmental and Social Policy (ESP) including the Environmental and Social Exclusion List (ESEL) and Environmental and Social Standards (ESSs) apply to this Project. The Project is placed in Category FI, as the financing structure involves the provision of funds to CEXIM pursuant to which AIIB delegates the decision-making related to the use of the AIIB’s funds insofar the subprojects meet the conditions to be agreed with the client. This will include the selection, categorization, appraisal, approval and monitoring of subprojects in accordance with AIIB’s ESP requirements. CEXIM’s (i) Environmental and Social Management System (ESMS), enhanced and aligned with AIIB’s ESP, and (ii) Green Financing Framework (GFF), developed and aligned to internationally recognized green catalogue, standards and principles, will be used as the Project’s E&S instruments.
The preliminary pipeline comprises of green subprojects such as renewable energy (solar and wind), construction waste management and others, in China. Impacts on communities’ health and safety, sensitive habitats, ecosystems and its services, and working conditions are potential E&S risks associated with such subprojects. Activities in AIIB’s ESEL and Category A subprojects will not be eligible for financing. Coal mining, coal transportation or coal-fired power plants, as well as infrastructure exclusively dedicated to support any of these activities, will also be excluded. CEXIM has been advised by AIIB of the importance on labor and working conditions related to renewable energy investments. AIIB will conduct prior review and approval of all subprojects to (i) facilitate knowledge transfer; (ii) implement enhanced ESMS in compliance with AIIB’s ESP requirements; and (iii) implement established GFF in alignment with internationally recognized green catalogue, standards, and principles.
CEXIM has published its enhanced ESMS and GFF on its website, in both Chinese and English. E&S assessment reports of subprojects (e.g., Environmental and Social Impact Assessment, E&S Management Plan, etc.) will also be disclosed in a timely manner. In addition, CEXIM will prepare and publish retrospectively a summary of E&S aspects and overview of the E&S impact of the subprojects semi-annually, subject to the People’s Bank of China’s regulatory requirements on information confidentiality applicable to the banking sector.
CEXIM has established a Project-level GRM, including contacts and processes to receive and handle related E&S matters, in both Chinese and English. The Project-level GRM will be made available to Project-Affected People (PAPs) and Project contracted workers and will also provide information on AIIB’s Project-affected People’s Mechanism (PPM). Under its enhanced ESMS, CEXIM requires sub-borrowers to establish a suitable subproject-level GRM and inform people in the project’s footprint about its availability. The GRM will receive and facilitate resolution of the concerns and complaints of people who believe that they have been adversely affected by the Project’s E&S impacts. Information including the Bank’s Policy on PPM is disclosed in both English and Chinese, and in an appropriate manner.
CEXIM will be required to maintain a comprehensive database comprising all relevant E&S information and report to AIIB a summary of the E&S aspects and overview of the E&S performance of the project’s portfolio semi-annually on an agreed schedule and template, subject to confidentiality obligations on the subprojects. AIIB will conduct ongoing monitoring and post-reviews of the selection and implementation of subprojects as part of its regular supervision, comprising engagement with CEXIM, potential site visits and detailed review of the E&S documentation of selected subprojects.