China: Chongho Bridge Green Facility

OBJECTIVE

The objective of the Project is to increase penetration of rooftop solar power generation in rural China and to support rural revitalization in China.

DESCRIPTION

The project is a non-sovereign backed loan facility to Chongho Bridge Management Limited (“Chongho Bridge”, the “Borrower” or the “Company”) to support its rooftop solar distributed generation business in rural China (the “Project”). The Company aims to reach total installed capacity of 100MW by end of 2023 and 500MW in 2025.

ENVIRONMENTAL AND SOCIAL INFORMATION

Environmental and Social Policy, Standards and Categorization. AIIB’s Environmental and Social Policy (ESP) including the Environmental and Social Standards (ESSs) and Environmental and Social Exclusion List (ESEL) apply to this Project. The Project has been identified as Category B, on the basis that any anticipated E&S risks and impacts will be localized, temporary and can be mitigated through an environmental and social management plan (ESMP). Procedures which are instituted in Chongho Bridge’s environmental and social management system (ESMS) will be enhanced to be aligned to AIIB’s ESP and include rooftop solar specific E&S considerations. Summary of ESMS both in English and Chinese will be disclosed timely by Chongho Bridge and AIIB in an appropriate manner. 

Environmental Characteristics. Rooftop solar installation provides a valuable source of renewable energy in rural areas that helps to avoid greenhouse gas (GHG) emissions and contribute to China’s overall decarbonization journey. The Project’s potential environmental impacts include health and safety on the construction of the physical works, electronic waste generated from operational maintenance of the solar PVs. Labor and working conditions in supply chains management will be incorporated in Chongho Bridge’s ESMS. Chongho Bridge has prepared Environmental and Social Impact Assessment (ESIA) including an Environmental and Social Management Plan (ESMP) and Stakeholder Engagement Plan (SEP) for Liao II Project and Tianjin Project, which has been disclosed on Chongho Bridge’s official website in both English (link) and Chinese (link), and also disclosed on AIIB’s official website in both English (link) and Chinese (link).

Social Characteristics. Chongho Bridge’s rooftop solar business follows the rooftop rental (developer-owned) model, where Chongho Bridge is responsible for developing and maintaining the solar facilities, and rural households rent their rooftops to Chongho Bridge. This approach avoids the land acquisition risk for the proposed Project and will bring social benefits to the rural community. With Chongho Bridge responsible for developing, operating, and maintaining the rooftop solar power stations, rural households can enjoy long-term rental income and livelihood improvement.

Climate Change and Paris Alignment. Solar power generation has significantly lower lifecycle emissions than fossil fuel-based power generation, the Project is aligned with the mitigation goals of Paris Agreement. Climate physical risk of the Project has been considered during the feasibility study stage, ESIA process, and climate resilience feature has been incorporated in the design of the Project. All solar PVs installed are subject to quality test against certain extreme climate conditions such as heavy snow, and wind pressure. All SPV facilities are insured for any loss caused by climate and other natural hazard. The Project is considered aligned with the adaptation and resilience goals of Paris Agreement.

Gender. Chongho Bridge has been promoting gender leadership internally. The solar business unit is led by a woman CEO and aims to maintain a management team with at least 50% of woman. Women of the rural households participating the Project activities will be fully consulted to ensure they are aware of the Project’s benefits to their households. Chongho Bridge will also promote woman participation in the Project’s operating and maintenance activities through a gender inclusive training program. To prevent any gender-based violence during project construction, the Company included Code of Conduct for Contractor’s Workers in the bidding documents, with an emphasis on zero tolerance of gender-based violence. 

Labor and Working Conditions. The ESMS includes requirements to identify and mitigate potential health, safety, social and environmental hazards in all project activities that pose a risk to employees and may also have the potential for disruption of site works. In addition, all suppliers and contractors will be advised of the importance of implementing appropriate management measures to identify and address issues related to the environmental and social provisions of the ESMS for the Project, including labor and working conditions and health and safety matters. Compliance with the ESMS is an essential part of the contract document with suppliers and contractors. This compliance as well as representations and warranties to be provided to Chongho Bridge by suppliers and contractors will be reflected in relevant agreements and contracts.

Stakeholder Engagement, Consultation, and Information Disclosure. Chongho Bridge has developed corporate level stakeholder engagement plan for solar business benchmarking AIIB ESS. Different stakeholders have been fully consulted for Liaoning II Project and Tianjin Project to be supported by Tranche 1 of the AIIB loan. The owners of the residential buildings were engaged on the details of the solar PV installation and their consent via the rooftop lease agreement. The ESIA and ESMP of the Liaoning II Project and Tianjin Project have been disclosed on Chongho Bridge’s corporate website in both Chinese and English, 30 calendar days in advance of AIIB’s financing approval.

Monitoring and Supervision Arrangements. During Project implementation, AIIB will require submission of relevant E&S documentation and E&S performance monitoring reports from Chongho Bridge in an agreed format. AIIB will conduct post-reviews of the implementation of Project as part of its regular supervision, comprising engagement with the Chongho Bridge, potential site visits and detailed review of the E&S documentation.

Project’s Grievance Redress Mechanism (GRM). Chongho Bridge has enhanced its existing GRM for solar PV business. Designated community liaison person will be established at village level at project sites, to timely respond any project related request or grievance. Local people can also make grievance to village head or local government, or to Chongho Bridge via corporate level GRM. The availability of AIIB’s Project-affected People’s Mechanism (PPM) will be disclosed at the Company’s website. The contacts of designated community liaison as well as corporate-level GRM will be disclosed to local communities concerned in a timely and appropriate manner.