Review

Two new regulations were recently issued in support of China’s Renewable Energy Law. For foreign investors who establish or invest in foreign invested enterprises (FIEs) in China for renewable energy projects, the Measures and Rules may provide a viable source of funding.

View background information about the Renewable Energy Law.

Provisional Measures on Administration of Special Funds for Renewable Energy Development

The Measures were issued by the Ministry of Finance and became effective on 30 May 2006. They empower the finance administration department under the State Council to establish new funds for renewable energy development and use.

Funds can be made available without any requirement to repay, or as loans with interest discounted. The interest may be discounted for between one to three years, and the maximum annual interest rate may not exceed 3%.

Specifically, the funds are for:

• technology and scientific research on renewable energy
• renewable energy projects in the countryside or rural areas
• construction of independent renewable energy electricity systems in rural areas or islands
• resource surveys, assessments for renewable energy and construction of related information systems; and
• promoting the localisation of equipment related to the development and use of renewable energy.

If you want to apply for funding, you must submit an application to the local branch of the National Development and Reform Commission (NDRC) which will then forward the application to the Ministry of Finance.

Rules of Accreditation of Exemplary Construction Projects with Renewable Energy Applications

The Rules were issued on 4 September 2006 by the Ministry of Finance and the Ministry of Construction and took effect immediately. The Rules were developed under the Provisional Management Rules of the Special Fund for Application of Renewable Energy on Construction Projects.

The Rules provide that the Ministry of Finance and the Ministry of Construction may select applications for projects to be included in a project database. A panel of specialists, established by the two ministries, will assess and accredit projects for funding.

To qualify for funding, project applications are assessed according to the Rating Table of Exemplary Construction Projects with Renewable Energy Application which includes the following criteria:

• technological advancement
• practical feasibility
• economic soundness
• exemplary effect (for example, whether the project may serve as a regional model or a construction model)

Once a project has been accredited, a public notice is issued for 10 days. If any major issues arise during this notice period, the accreditation of an exemplary project may be rescinded.

What does it mean for you?

The success of the Measures and Rules will depend on how quickly local government authorities implement them. Apparently, so far, no local authority has prepared application forms.

Although applications for funding are made to the local National Development and Reform Commission, ultimate approval must still be given by the Ministry of Finance.