China: Lionbridge Leasing EV Transport Green Transition Facility

OBJECTIVE

This Project objective is to contribute to the decarbonization of logistic vehicles’ transportation in China and to support Lionbridge Leasing’s Paris -aligned net-zero ambition.

DESCRIPTION

This Non-sovereign backed Project will provide a USD60 million equivalent CNY, senior unsecured loan to Lionbridge Leasing to acquire 3,000 to 3,200 logistics electric vehicles (EVs) for financial leasing to the lessees that are mainly self-employed truck drivers in a sale-lease back modality.

Through this Project, AIIB will help Lionbridge Leasing to develop a credible Paris-aligned Net-Zero transition plan which will enable Lionbridge Leasing’s business activities to transition from carbon-heavy to carbon neutrality by 2050.

ENVIRONMENTAL AND SOCIAL INFORMATION

AIIB's Environmental, Social Policy (ESP) including Environmental and Social Standards (ESSs) and Environmental and Social Exclusion List (ESEL) is applicable to the project. The proposed investment will support Lionbridge Leasing to provide logistic EV finance. Lionbridge Leasing is not responsible for the maintenance and operation of the vehicles, and the vehicles’ ownership will be transferred to the client after two-year maturity of the finance service, therefore the ES risks and impacts are low or minimal and thus the Project is categorized as Category C.

Lionbridge Leasing’s Environmental, Social, and Governance Management System as its ESMS has been developed with reference to IFC Performance Standards. It includes procedures to (i) screen investments against the Environmental, Social, and Governance Exclusion List; (ii) Environmental, Social, and Governance due diligence questionnaire focused on the vehicle service activities; (iii) GRM for contracted employee and external stakeholders; (iv) monitor E&S risks and impacts of investments; (v) report to its management and investors and (vi) train new staff (vii) policy on cybersecurity. Overview of the ESMS and annual ESG report in Chinese at least will be disclosed at Lionbridge official website.

Lionbridge Leasing’s ESMS includes provisions for the Grievance Redress Mechanism (GRM). The client has a designated department to response internal and external Grievance. Internal and external grievance can be filed through designated contact email published on the official website (狮桥集团 (shiqiao.com)). During Project administration, AIIB will receive and review annual E&S reports from Lionbridge Leasing in an agreed format.

As of year-end 2021, 60 percent of Lionbridge Leasing’s short-distance logistics vehicles are EVs. Although AIIB fund will only support EVs, Diesel-fueled trucks are still dominating Lionbridge Leasing’s portfolio of long-distance logistics vehicles. To achieve greater climate impact, this project will further support Lionbridge to develop Paris-aligned climate transition plan, with credible, science based near-term (2030) and long-term (2050) climate targets.