China’s environmental protection industry is currently not small and scattered. In fact, there is a large number of environmental PPP projects because the government insists that projects involving the environment are classified as PPP. However, the enthusiasm of environmental protection enterprises to take on this kind of projects is declining.
The biggest difficulty for environmental protection enterprises is the rise in financing costs, while financial institutions are being selective when it comes to environmental protection enterprises and projects. On the one hand, in recent years, the scope and volume of environmental protection projects have continued to expand, and the required funds have also begun to rise. But on the other hand, the projects did not match the financing, and the financing system was not established.
Some environmental protection enterprises are facing financial difficulties, especially for some small and medium-sized enterprises. The good news is that the general office of the CPC central committee and the general office of the state council have recently issued the guidance on promoting the development of small and medium-sized enterprises.
In terms of policy, the record system of environmental impact registries will be implemented. In terms of expanding channels, the issuance mechanism will be further improved, and the financing support tools for private enterprises, and reasonable financial needs for private enterprises will be implemented, which is facing temporary liquidity constraints due to normal business operations by selling credit risk release certificates and providing credit enhancement services. In terms of financial strains, financial institutions are encouraged to expand the financing of export credit insurance policies and pledged financing of export tax rebate accounts to meet the financial service needs of import and export enterprises.