JEDDAH, 10 February 2006 — With an annual growth rate of 9 percent and oil price of $70 per barrel, China’s uncontrolled thirst for fossil fuel is worrying. In response, the World Bank approved on Feb.7 a $86.33 million loan to scale up China’s use of renewable energy as the country’s demand for power increases.
Out of the $86.33 million of the World Bank’s loan to China, $67 million would go to the development of the 100MW Huitengxile Wind Farm in the Inner Mongolia Autonomous Region, which is currently home to approximately 70MW of wind generation capacity.
The reminder of $19.33 million would finance the rehabilitation and development of selected small hydropower projects (not exceeding 10MW) in the Zinjiang province.
The $86.33 million loan was given out by the International Bank for Reconstruction and Development (IBRD), the main institution in the World Bank group.
The loan is a variable spread loan, which matures in 20 years with a 5-year grace period. The Chinese renewable energy project, which is set to start in April this year is expected to be completed in March 2010.
“China’s energy demands and its need to decrease air pollution make large-scale renewable energy development an important goal,” said Noureddine Berrah, lead energy specialist for China.
“The idea behind the program is to increase the commercial, large-scale use of renewable energy sources like wind, small hydropower, and solar energy so that they contribute to meeting the fast-growing electricity demand from homes, farms, and businesses.”
Chinese President Hu Jintao warned in a speech given on the Chinese New Year’s Day last month that his country has to rein in surging use that has made it one of the world’s biggest oil importers.
“China must create an energy-efficient, environmentally-friendly societies,” said Hu in the speech, according to state media.
According to the World Bank’s statistics, China’s gross domestic product quadrupled between 1980 and 2000, and its energy consumption more than doubled to about 1,300 million tons of coal.