The finance package will help expand the supply of cheaper and cleaner energy to millions of Chinese households, with the aim of improving their living conditions and reducing respiratory illnesses.
IFC will provide an US$86 million loan from its own account and US$64 million from the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio. The package also includes a US$150 million syndicated loan from 19 commercial financial institutions, which was underwritten by The Royal Bank of Scotland plc (RBS).
The financing is intended to support China Gas’ expansion of city gas distribution infrastructure and the building of new natural gas refilling stations. Switching to gas will help reduce the use of polluting coal and other fuels that are more carbon intensive for industrial, household, and road transportation use, thus improving the environment for people living in crowded cities.
Liu Ming Hui, Executive Chairman, Managing Director, and President of China Gas, stated:
“IFC’s support provides us with the necessary capital to pursue our expansion plans, including investment in more than 30 new city-gas projects and the construction of 200 natural gas stations every year. IFC’s global vision and sector expertise made this multi-party financing package possible.”
Lance Crist, IFC’s Global Head of Oil and Gas, commented:
“Natural gas holds great potential for supporting China’s continued economic growth. IFC’s long-term financing will help China Gas make this clean-burning fuel available in more places at a time when Chinese cities are growing quickly.”
Aditya Agarwal, Head of Loan Markets, APAC, RBS added:
“The syndicated loan received very strong interest from a wide variety of banks, with demand exceeding the deal size three times. It is a testament to the strong quality of the company, RBS’ confidence in underwriting, IFC’s stamp of approval, and the credibility of IFC’s B-loan program.”