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June 19, 2008 - Press release

ADB and Dalkia supports expansion of district energy system to improve energy efficiency in PRC.

PARIS, 19 June 2008 - The Asian Development Bank (ADB) and Paris-based Dalkia Group have entered a multi-project loan agreement to finance a series of district heating, district cooling, and cogeneration projects in the People's Republic of China (PRC) to improve energy efficiency and reduce air pollution.

Under the agreement, the ADB funding support comprises a loan of up to CNY1.4 billion ($201.3 million) funded by ADB and another loan of up to CNY1.4 billion funded by international or local banks under participation agreements with ADB. This is ADB's first private sector district energy project.

ADB funding will be extended to joint ventures established by Dalkia Asia and local partners to finance rehabilitation and expansion of district energy and cogeneration infrastructure. District energy refers to the production of steam, hot water or chilled water at a single central utility plant for distribution to many buildings.

Dalkia's joint ventures will manage district energy system and deliver reliable heat supply to residential, industrial and commercial customers. Dalkia expects to commence operations of eight to ten joint ventures during 2008-2013.

"This project will bring clean, reliable, safe, and high-quality heating and cooling services to the municipalities, and expand private sector investment in district energy system projects in PRC," said Hisaka Kimura, ADB Investment Specialist.

Heating systems and coal-fired stoves consume almost half the country's coal and are the largest single-point sources of urban air pollution. District energy systems are one of the most effective ways to maximize energy efficiency of heating, cooling and the electricity generation process, improving local air quality and helping to slow down global warming by reducing carbon-dioxide emissions.

"ADB aims to promote public-private partnership in the district energy sector in PRC and other countries in Asia by supporting private sector investors. This project will demonstrate district energy projects can attract more private sector companies, municipalities and financial institutions," said Jo Yamagata, Director of ADB's Private Sector Operations Department.

Philippe Beaute, Dalkia's Chief Finance Officer, said: "We are proud of this partnership, which will allow us to develop our district heating business in PRC. Building on our experience in Europe, where we are a leading provider of energy and environmental efficiency services, we will be able to offer solutions aligned with the changing environmental concerns of the Chinese government."

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Media contacts:

  • Dalkia : Peggy Dufour - Direction de la Communication
    Tel: + 01 71 00 72 77
    Email:pdufour@dalkia.com
  • ADB : Nicholas Eric vonKlock - Media Relations Specialist
    Tel: + 632 632 5730
    Email:nvonklock@adb.org

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