Hebei Region—Henan Cleaner Fuel Switch Investment Program
Total Page:16
File Type:pdf, Size:1020Kb
People’s Republic of China: Air Quality Improvement in the Greater Beijing–Tianjin– Hebei Region—Henan Cleaner Fuel Switch Investment Program Semiannual Program Implementation Progress Report 2020.6-2020.12 Henan Yu-Tian New Energy Co., Ltd. JANUARY 2021 Chapter 1 RESULTS AND DISBURSEMENT A.The Program results 1.The results-based lending (RBL) mode is adopted for the Program. The disbursements will be based on the completion of eight (8) disbursement-linked indicators agreed by ADB and the program unit. Indicator 1:Indicator 1: Number of customers: By the end of 2018, the Program had covered 307,708 households. ADB should expand its assistance to cover 1.20 million households by 2023. The target value set for 2020 was to cover at least 400,000 new households and the actual increase was 633,000. Indicator 2: Gas consumption: By the end of 2018, the amount of cleaner gas consumed reached 13,900 Nm3. By the implementation of the ADB program, by 2023, the amount of cleaner gas consumed should reach 317 million Nm3. The target value set for 2020 was at least 32.35 million Nm3, and the total actual gas consumed was 157,600 Nm3. Indicator 3: Mobilization of private and public sector investment: From 2022, the CNY915 million of commercial financing for the cleaner fuel switch investment should be mobilized for continuous overall program implementation. This indicator was not involved in 2019 and 2020. Indicator 4: Expansion of cleaner gas network system: By the end of 2018, the pipelines of 6,877 km were laid. By the implementation of the ADB program, by 2021, the planned total length of natural gas distribution network pipeline installed should be 26,880 km. The target value set for 2020 was 17,920 km of natural gas distribution network pipeline, and the total actual length was 18,500 km. Indicator 5: Stations: By the end of 2018, one (1) natural gas station was constructed. By the implementation of the ADB program, by 2021, the total number of constructed natural gas stations will reach 12. The target value set for 2020 was to construct at least 8 natural gas stations, and the total natural gas stations constructed was 3. Indicator 6: Development of alternative cleaner fuel: By 2023, the total annual biomass gas production should reach 17 million Nm3. The Biomass gas site selection, project development, and bidding and procurement have been completed in 2020. Indicator 7: Raising awareness of using cleaner fuel: The publicity activities of using cleaner fuel should be conducted, especially for the women using the energy in the households, to reduce the barriers for the use of cleaner fuel in the target population. Throughout the implementation of the Program, at least 500 awareness-raising publicity activities should be conducted. The target set for 2020 was to conduct at least 100 awareness-raising publicity activities for clean fuel use, with at least 50% of participants 1 being women. YTNE actually conducted 226 awareness-raising publicity activities for clean fuel use, of which more than 50% of the participants were women. Indicator 8: Institutional development and capability improvement: Throughout the entire implementation of the ADB program, the institutional and organizational capability of ZYIG and YTNE in corporate governance, financial and risk management, social and environmental safeguard, and gender balance, specifically including (i) developing an integrated enterprise resource planning and management system; (ii) strengthening the corporate governance and management system for financial and risk control and environmental and social safeguard; (iii) expanding the financing capacity and financing channels for commercial loans; and (iv) increasing the human resources to ensure the effective implantation of the Program. The goals set for 2020 were (i) to improve the integrated enterprise resource planning system; (ii) to engage 250 employees at Yu-Tian New Energy Company by the end of the year (20% of which are women). YTNE has actually (i) improved the enterprise resource system; (ii) engaged 430 employees by the end of the year, including 316 male employees and 114 female employees (accounting for 27%). 2 Table 1: Status of the Results Framework (As of 31 December 2020) Linked Indicator DLI Annual Outcomes in S/N Objectives in 2020 Item 2020 400,000 customers connected to the gas. (Medium-pressure ventilation is Number of connected to the pressure regulating 633,000customers 1 customers DLI 1. box in the village, and the low- connected to the gas connected to pressure pipeline in the village can be (cumulative) the gas replaced for ventilation at any time before it is ventilated to the meter or has been accepted) 32.35 million Nm3 of total gas 2 Total gas DLI 2. 15.76million Nm3 of gas consumption by customers connected consumption consumption to the gas at the end of the year 17,920km of gas distribution network 18500km of gas Gas distribution 3 DLI 4. pipeline installed (cumulative) distribution network network (medium-pressure and low-pressure pipeline installed pipeline pipeline construction) (cumulative) 4 DLI 5. 3 gas stations built Gas station 8 gas stations built (cumulative) (cumulative) Basic work of site selection, project Site selection, project 5 DLI 6. approval, bidding and procurement, Biogas approval, bidding and and civil construction of biogas procurement completed completed at the end of the year Totally 206 gas use awareness campaigns 100 gender sensitive cleaner in line with ADB Publicity of 6 DLI 7. awareness programs convened in standards convened in gender total, and at least 50% of participants 2020, with 226 in total. awareness are women At least 50% of participants are women. 7 DLI 8. Institutional and 1. Integrated enterprise resources 1. Integrated enterprise 3 organizational planning systems improved; resources planning capacity 2. Totally 250 staff of YTNE at the systems improved; enhanced in end of the year (at least 20% women) 2. 430 staff of YTNE as management of October 2020 in information total, including 316 system, men and 114 women, financial and with women accounting risk for 27%. management, social and environment safeguard with full staffing. Chapter 2 EXPENDITURE FRAMEWORK AND FINANCING A Expenditure Framework 2. The content of program expenditure mainly involved the expansion of cleaner gas network system, the enhancement of cleaner fuel awareness, the institution building and capacity building, the management, and the interest incurred during construction and commitment charges. a. Construction costs for natural gas support facilities: 633,000 households b. Cost of purchased natural gas c. Costs for natural gas station construction and equipment purchase: 3 new natural gas stations were built d. Expansion of cleaner gas network system: The program completed the access to system of 633,000 households, involving the construction of 18,500 km, including the works outside villages of 3,500 km and the works inside villages of 14,800 km. e. Safety training: At least 50% of program participants were women. f. Institution building and capacity building: This mainly included the upgrading of information and management systems, the monitoring and verification by third-party institutions, the engineering consultative services, and the reinforcement of financial and risk management. g. Interest incurred during construction and commitment charges: The interest incurred during construction involved the loans from ADB and the loans from banks in China. For the loans from ADB, the repayment period would be 25 years, including the grace period of 5 years (in which only the interest would be paid without the repayment of principal), and the annual consolidated interest rate of the loans would be 2.31% (the 6-month LIBOR would be 1.71% + 0.5% interest margin + 0.1% maturity premium). For the loans from banks in China, the repayment period would be 15 years, including the grace period of 3 years (in which only the interest would be paid without the repayment of principal), and the annual consolidated interest rate of the loans would be 4.9%. The commitment charges would be collected 60 days after 4 the signing of the loan agreement, and the annual commitment charges would be 0.15% of the loan amount not withdrawn. B Expenditure Status Table 2: Estimated Program Expenditure (As of 31 December 2020) Expected expenditure Percentage of S/N Item (Jan 1, 2020 - December 31, 2020) expenditure in (CNY10,000) EUR million total amount (%) Construction costs for natural 1 189,000.00 24,097.50 89.88% gas support facilities 2 Cost of purchased natural gas 3,700.00 471.75 1.76% Costs for natural gas station 3 construction and equipment7,500.00 956.25 3.57% purchase Expansion of cleaner gas 4 8,000.00 1,020.00 3.80% network system Institution building and capacity 5 350.00 44.63 0.17% building 6 Financial and risk management 1095 139.6 0.52% Interest incurred during 7 641 81.72 0.30% construction Total 210,286.00 26,811.45 100.00% 3.The total expenditures of the program were CNY2,102,860,000, in which EUR45.02 million would be the loans from ADB (according to the exchange rate of EUR1 = CNY7.84, it could be converted into CNY353,132,400), and the remaining amount would be the loans from China Development Bank and the self-raised funds of the program unit. ( (The above investment amount is the estimated budget amount. As the actual accounting treatment will lag behind, the actual investment amount shall be subject to the next verification report.) 5 Chapter 3 PROGRAM SYSTEMS AND IMPLEMENTATION ARRANGEMENTS A Monitoring and Evaluation System 4.The Management Information System of Henan Yu-Tian New Energy Co., Ltd. (YTNE) mainly includes the Customer Information System, Financial Management System, Engineering and Construction Management System, Equipment and Maintenance System, Security Monitoring System, Material Management System, and Human Resource Management System, which form the information management system of YTNE.