SHANGHAI (Reuters) – Eastern China’s Jiangsu province, a major manufacturing region in the Yangtze river delta, has launched an 8 billion yuan ($1.2 billion) environmental credit fund to help promote green development and fight pollution, the local government said.
Jiangsu, which neighbors China’s financial center of Shanghai, has been one of the focal points of the country’s environmental clean-up efforts since 2013.
The city of Xuzhou, a major steel producer in Jiangsu, has appeared regularly on the list of China’s most polluted cities in recent months, prompting concerns that smog is shifting south following a crackdown in northern regions.
The provincial government has provided 400 million yuan to launch the new fund, with an initial 8 billion yuan of extra financing to be offered through banks, the Jiangsu environmental protection bureau said in a notice on Wednesday.
The new fund will be used to help finance environmentally friendly projects, with each approved project allowed to borrow a maximum of 20 million yuan.
The loans must be paid back within five years, and the interest rate will be determined by the “environmental credit rating” of the enterprise involved, the notice said.
In a document published last month, China’s cabinet, the State Council, said it would devise new policies to encourage the development of green financing, and it also promised to establish a state “green development fund”.
Reporting by David Stanway; editing by Richard Pullin