The Research on the Problems of the Project Finance in the Energy Saving Service Industry of China and Its Countermeasures

Abstract

The paper aims to examine the development of new financing models for project finance to attract private investors to finance large Chinese energy infrastructure projects. In particular, the paper investigates the uniqueness of the project finance as a rapidly growing field in finance, the financial characteristics of the project bond market as one of the vehicles for funding energy projects, and the role of the credit support provided by the government to promote the bond-based financing schemes. The paper is organized as follows. Section 1 provides a general description of project finance. Section 2 identifies the economic reasons for using project finance and assesses the role of the project bond market to fund project finance in the energy industry. Section 3 evaluates the proposed financial support from the Chinese Investment Bank and the Chinese Union to boost the Chinese project bond market. Final sections discuss policy implications and conclude.