China: Nature Finance Accelerator Program – Bank of Jiangsu

OBJECTIVE

To catalyze private capital for nature finance in support of China’s ecological transition and Kunming-Montreal Global Biodiversity Framework implementation, while harnessing cross-border green finance to scale eco-friendly and climate mitigation investments across selected AIIB members.

DESCRIPTION

The Nature Finance Accelerator Program (NFAP or “the Program”) is AIIB's first standalone investment initiative dedicated to nature finance – an emerging yet increasingly critical area within sustainable finance. The Program aims to scale up investments in nature infrastructure, nature conservation, and nature-based solutions. Under the Program, AIIB will work with Bank of Jiangsu Co., Ltd. (BOJS) and other partner banks through its on-lending facilities to support a portfolio of high-impact, nature-related subprojects aligned with the MDB Common Nature Finance Taxonomy. The subprojects will be primarily located in China's Jiangsu and Zhejiang provinces and are expected to contribute to a paradigm shift toward ecological civilization. In addition, the NFAP will adopt a programmatic approach that integrates subproject preparation with capacity building activities to mobilize private capital at scale.

Under the Bank of Jiangsu Project (the “Project”), at least 80% of the loan proceeds will be earmarked for eligible subprojects classified as nature finance under the MDB Common Nature Finance Taxonomy across China. Eligible nature-related activities will involve one or more of the following: (a) restoring or conserving natural ecosystems, (b) addressing key drivers of nature loss, or (c) integrating nature-based solutions in infrastructure. Priority sectors in the Jiangsu context include Water, Sanitation and Waste Management, and Urban Development.

Up to 20% will be directed toward cross-border green subprojects in emerging market AIIB members, aligned with the Multi-Jurisdiction Common Ground Taxonomy. These subprojects will be required to meet recognized green eligibility criteria and deliver measurable contributions to addressing climate-change-related challenges, with a focus on renewable energy, energy storage, electric vehicles, and related infrastructure and productive sectors along the value chain.

ENVIRONMENTAL AND SOCIAL INFORMATION

Framework to strengthen institutional capacity and promote the integration of gender-responsive considerations across BOJS’s operations, including nature finance activities. E&S risks of subprojects will be further assessed through BOJS’s ESMS screening and due diligence procedures.

Occupational Health and Safety (OHS), Labor and Employment Conditions: BOJS’s existing ESMS includes requirements for the identification, assessment, and management of OHS, labor, and employment-related risks in line with the nature and scale of subproject E&S risks. Eligible subprojects will be required to comply with applicable national labor laws and standards, as well as relevant provisions of AIIB’s ESP. The anticipated OHS risks are expected to be site-specific and primarily associated with construction activities, material handling, and field operations, including worker safety, equipment use, and site conditions. These risks are expected to be temporary and manageable through the implementation of appropriate subproject-level OHS measures, including safe work practices, use of personal protective equipment, and emergency preparedness and response arrangements. AIIB advised BOJS of the importance of labor and working conditions and relevant requirements have been incorporated into the ESAP.

Stakeholder Engagement, Consultation and Information Disclosure: BOJS has established a consistent practice of publicly disclosing its ESG performance. It has published an Annual Social Responsibility Report since 2013, which was renamed Annual ESG Report in 2021 and is made publicly available on BOJS’s official website. Since 2023, BOJS has also disclosed its Carbon Emission Reduction Loan Information on a quarterly basis and has published its PRB Self-Assessment Report since 2024. BOJS will be required to disclose an overview of its E&S policy and ESMS in accordance with AIIB ESP requirements.

Project Grievance Redress Mechanism (GRM): BOJS established a GRM with detailed protocols, and disclosed it on its website. It provides multiple access channels for stakeholders, including telephone, mail, complaint boxes, and in-person communication. Subprojects will be required to establish appropriate subproject-level GRMs and inform local communities of their availability. AIIB’s Project-affected People’s Mechanism (PPM) applies to this Project as an independent recourse mechanism. Further information will be disclosed in an appropriate manner.

Monitoring and Reporting Arrangements: BOJS will submit an annual E&S performance report for the Project’s portfolio on an agreed schedule and template. AIIB will conduct post-reviews of subproject selection and implementation, including engagement with BOJS, site visits as needed, and a review of E&S documentation, and will undertake prior review and approval of higher-risk Category B subprojects and of the first three subprojects.