Hebei Clean Heating Project

Client: Hebei Provincial Foreign Debt Management Center, PRC

Duration: 2014-2016

Location: Hebei Province, PRC

Contract Value: CNY 3,140,700

Loan Project Value: USD 248.33 million

Funding: World Bank

Catalogue：Energy

Project Description

Hebei Province is facing tremendous pressure to mitigate environmental impacts of its economic growth. Hebei is a key center for manufacturing, including energy intensive heavy industry. In an effort to combat local air pollution, neighboring municipalities, especially Beijing, continue to transfer energy intensive and polluting industries to Hebei Province. As a result, Hebei is a source of major air pollution in the Jin-Jing-Ji airshed (the region covering Tianjin, Beijing and Hebei). This project assists Hebei WB project management office to prepare the Hebei Clean Heating Project by using the domestic fund. The Loan project has identified four sub-project areas as Chengde City, Zhangjiakou City, Xingtai City and Pingshan County for helping evaluating and optimizing their projects’ scope to meet the requirements of WB policies.

The Hebei Provincial Government has applied financing from the World Bank, and the project has the following two components: (i) District Heating Subprojects. This component will finance the construction and rehabilitation of district heating facilities in the four project cities (four subprojects) with a total heating area of 38.7 million m2, including 13.5 million m2 of new buildings. Each subproject is tailor fit to the needs of the participating city, but will also have common features aiming to modernize operations and make them more efficient.(ii) Institutional Capacity Building and Project Management Support, including: (a) project management support to the HPMO and the four heating companies; (b) capacity building support to the heating companies in district heating management, operation and maintenance, and World Bank project implementation procedures; (c) training, workshops and study tours to exchange and learn about good practices in the DH sector; and (d) technical assistance activities to tailor fit the needs of project’s companies.

Services Provided by NAREE

NAREE provided the project preparatory consulting service to prepare the loan project, undertaking due diligence in technical, economic and financial, environment and social development. NAREE ensured the project in compliance with the domestic and WB’s requirements and incorporation of international best practices in the project design. Detailed tasks conducted by NAREE during the preparatory consulting service includes the followings:

• Baseline study and sector assessment

• Feasibility Study Report review and project design optimization

• Economic and financial due diligence

• Safeguards due diligence, including environmental, social and resettlement assessment, relevant action plan and review framework development

• Financial and procurement risk assessment, Investment plan and procurement plan preparation

• Assistance PMO in preparing and submitting the Foreign Capital Utilization Plan to NDRC for approve

• Institutional capacity building