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EC-LINK NEWS

EC-Link Green Finance Pilot Project:
Green Public Transportation System Demonstration Project
11 Aug, 2020

EC-Link Technical Support Summary 

EC-Link provided significant support to this project, which helped the project development and increased its bankability through a Pre-feasibility study process. The EC-Link project also identified the green financing resources and steered the project preparation to meet specific requirements of Shandong Green Development Fund. The detail Technical Support included: a) developing the project to maximise green impact and to document this impact so as to meet the eligibility criteria of downstream green financing, through rigorously documenting the results of the Pre-Feasibility Study; and b) stakeholder capacity building and trainings on green finance.  

Project Information 

Project Name, Type and Sector

Green Public Transportation System Demonstration Project

Public transportation, bus procurement and facilities construction.

Location

Qingdao city, Shandong Province, People’s Republic of China 

Project Rationale

Qingdao is the largest city and economic hub of Shandong province.

The Qingdao Green Public Transportation project is systematically designed to meet 1) the increasing public demand for better public transport both in terms of service capacity and quality, 2) better traffic flow by optimizing traffic routes, 3) green and low carbon development, also targets set under the low carbon city program and aligned with the focus area of the energy efficiency project creating the backbone of a Green Corridor.

As designed, the project will significantly reduce carbon dioxide emissions and help to achieve Qingdao’s committed carbon peaking by 2020. The co-benefit will be reduction of other transport-related emission.

Description

There are about 6,000 old diesel buses in the city, operated by three major state-owned bus companies. The project plans to replace the diesel buses and explore ways to apply renewable energy to replace electricity from coal power, and also establishing a green power charging system. 

Under the concept of maximising green impact, there are a number of sub-project components designed in the project proposal, which including, 1) purchasing of 953 electric buses, 2) green bus route design optimization, 3) 2 major bus depots, 4) 208 charging piles and 300 intelligent electronic bus stop signs, and 5) low-carbon operation bus dispatch management systems. 

The project geographically covers downtown areas, with coordinated investment designed to maximise impact in reducing GHG emissions, increasing resilience and reducing pollution through coordinated investment in energy efficiency, public transport and other climate-related sectors over a large area of the city.  Given the standard of 8-year operating life of busses in the city, the project is the first phase of a broader project that is expected to have a construction period of 10 years.

Key Climate Impacts  

The project is estimated to contribute 3.15million tons of carbon reduction in 10 years:

  • Reduce 523,000 tons of CO2 emissions from the electronic buses’ operation 
  • Reduce 28,000 tons from green depots.
  • Reduce 163,000 tons from intelligent dispatching system.
  • Reduce 220,000 tons from the smart energy consumption and emission management system
  • 554,000 tons from the Carbon Offset Scheme for personal and micro enterprises
  • Reduce 1,660,000tons of CO2 from reducing private driving.

Co-benefit reduction of CO emission is 4292 tons, and HC 419 tons, NOx 4931 tons, PM2.5 170 tons, PM10 190 tons, SO2 61 tons.

Summary of Development Outcomes 

  • Meet the travel demand of about 170 million trips per year in Qingdao City;
  • Improve public traffic flow to alleviate urban road congestion. 9million urban citizens will be benefited;
  • Provide at least 200 employment opportunities for the upstream and downstream industries of public transport in the coming years.
  • Improve the level of public transport services to attract more citizens to choose public transport and consequently reduce use of private cars, then reduce CO2 emission and other transport related pollution.
  • Establish a green power charging system. Vehicle battery recycling will reduce environmental pollution and potential hazards caused by waste batteries. 

Implementing Plan and Structure

The implementation plan will be 953 e-bus purchase within 2 years ie. 483 and 470 respectively, and the construction of depots and the installation of relevant facilities over the same 2 years. 

Two bus depots will be built for providing functional services and supporting facilities for bus operation, in terms of bus parking, power charging and maintenance etc. These two depots will be built in Sichuan road and Maidao road respectively. Development approvals are in process. The traffic management authority expects to pursue comprehensive development on site, which can increase the commercial revenue of the project. The authority also expects a qualified social partner to further develop over the site under a PPP modality, increasing project viability.

Procurement Method 

The proposed implementation arrangements will focus on a new Special Purpose Vehicle (SPV) that will enable the efficient management of the project.

Direct physical investments in bus depot construction, 953 full electric buses and corridor development; and the provision of equipment through service contracts.

The project procurement will also follow the Green Procurement process.  

Status of Preparation 

Studies for the preliminary design of bus network, planning of bus lanes and ticket pricing research, intelligent dispatching system, energy consumption and carbon emission management have been completed or are under implementation. 

Risk study, Carbon Offset Scheme will be implemented in the first project year, as well as, the intelligent bus stop signs, vehicle battery recycling. 

Pre-feasibility study with technical, governance, economic/financial, environment/social completed.

The authority would like to apply additional Technical Assistance (TA) support from ADB, to do more detail analysis of the major components. 

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