ADB loans $24M to Inner Mongolia wind farm

Manila, Philippines-based Asian Development Bank said today it plans to partly finance a $73 million wind farm in the Inner Mongolia Autonomous Region.

The move is intended to support China's efforts to cut greenhouse gas emissions and promote private investment in renewable energy, the bank said. This is expected to be the first private-sector wind farm financed by the bank in China.

The bank said it is providing a long-term loan for RMB 164 million ($24 million) to Datang Sino-Japan (Chifeng) Renewable Power, a joint venture between state-owned China Datang and Japan’s Kyushu Electric Power, Sumitomo and Sumitomo Holdings.

The proposed 12-square-kilometer (12,000,000 square meters) wind farm in Chifeng City, Inner Mongolia, is expected to provide electricity to the national grid, while reducing carbon dioxide emissions by 140,000 tons per year.

"The lack of finance on reasonable terms has held back the development of clean energy projects in the People’s Republic of China,” said Hisaka Kimura, an investment specialist in the bank’s private sector operations department, in a news release. “This project could become a model for future collaborations between state-owned enterprises and foreign investors in renewable energy projects.”

China follows the United States as the world’s second largest power consumer. Much of China’s GHG emissions come from its heavy reliance on coal to produce power (see A snapshot of clean technology in China and China to close 31GW of coal power plants).

The Chinese government has targeted wind power as a clean energy alternative to fossil fuels. A 2008 report by Global Wind Energy Council and Greenpeace International identified China as the world’s fastest growing wind-energy market (see China drives global market, supply for wind).

China generated 12 gigawatts from wind power in 2008, and the government intends to boost that to 100 GW per year by 2020. The new Chifeng project is expected to produce about 133 gigawatt hours a year. According to the release, it should also generate carbon credits under a section of the Kyoto Protocol that allows buyers in industrialized countries with GHG commitments to purchase carbon credits from developing countries, such as China, to meet those commitments.

Last month, the bank said it plans to double its annual clean energy investment to $2 billion by 2013 (see ADB to double clean energy investments to $2 billion). The intent, under the bank's Energy Efficiency Initiative, is to accelerate low carbon growth and reduce GHG emissions. The bank, which is dedicated to reducing poverty in the Asia and Pacific regions, hit the $1 billion investment mark in 2008.