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The International Finance Corporation (IFC), part of the World Bank Group, will loan US$22 million to a private company to build three small hydroelectric stations in southwest China.

The German Investment and Development Company and French Promotion and Participation Company for Economic Cooperation, both IFC partners, would also provide loans of US$13 million and US$10 million, respectively, for the project.

The three lenders signed an agreement on the project, which will cost 600 million yuan (US$75 million), with the Yunnan Zhongda Yanjin Power Generation Company on Thursday in Hangzhou, capital city of east China's Zhejiang Province.

Under the agreement, the Yunnan company will use the loans, to be repaid in 15 years, to construct the plants with a total capacity of 78,000 kilowatts, on the Baishui River in Yanjin County, Yunnan Province.

It was the first time the IFC had provided loans for a clean energy project in China, said Lars Thunell, IFC executive vice-president.

The project, which began in June 2004, would generate 380 million kwh of electricity every year by the end of 2007, reducing the county's annual emissions of greenhouse gases by eight million tons, said Thunell.

The IFC would continue to support China in developing clean and renewable energy, with special emphasis on assisting private enterprises, he said.

The IFC is the only arm of the World Bank Group catering to the private sector in developing countries. It has loaned a total of US$2.45 billion for 101 projects in China.

(Xinhua News Agency May 12, 2006)