An investor group led by China’s Ministry of Finance, Ministry of Ecology and Environment and the city of Shanghai has raised 88 billion yuan ($12.7 billion) for the country’s first dedicated environmental fund.
The three parties are leading a group of 26 investors – most of them state-owned entities – to commit capital to the new fund, dubbed the National Green Development Fund (NGDF).
The NGDF will primarily be used to invest in national strategic programmes such as the green development of the Yangtze River Economic Belt, which covers nine provinces and two centrally-administered municipalities.
The Ministry of Finance, which administers China’s macroeconomic policies and annual budget, will be the fund’s single largest contributor with a 10 billion yuan ($1.4 billion) allocation.
The country’s big four state-owned banks, namely Bank of China (BOC), China Construction Bank (CCB), Agricultural Bank of China, and Industrial and Commercial Bank of China (ICBC), will each contribute 8 billion yuan ($1.1 billion) over five years to the green investment fund.
The NGDF will also receive capital commitments from local finance ministers and major state-owned enterprises across the 11 provincial-level regions along the world’s fourth longest waterway.
The fund is aimed at “strengthening the construction of ecological civilization” and is meant to “guide social capital to invest in green development fields such as pollution control, ecological restoration and spatial greening, energy conservation and utilization and clean energy,” said the Bank of China in its statement.
Between 2016 and 2020, the Chinese government has allocated 78.3 billion yuan to tackle water pollution, 97.4 billion yuan to fight air pollution and 28.5 billion yuan on soil pollution, as well as another 20.6 billion yuan to tackle environmental problems in rural regions, Reuters recently reported.