The International Finance Corporation (IFC) has led the lending on US$300m worth of facilities for China Gas.

The finance will be used by China Gas to help convert some of China’s energy mix from coal to gas, thus cutting carbon emissions.

It is the IFC’s largest infrastructure financing commitment to date, but senior officials at the bank say it will fund some US$1bn of infrastructure projects in mainland China over the next 18 months.

Speaking to GTR, the IFC’s global head of oil and gas Lance Crist said: “IFC views this investment as an initial step of a long-term relationship with China Gas. IFC expects to provide more support to the company as it continue to grow and increase the availability of natural gas in China.”

This investment will help China Gas to expand its natural gas distribution network. Lance Crist, IFC

The US Energy Information Administration estimates that coal accounts for 69% of China’s energy mix (2014). Natural gas, on the other hand, adds just 4% to the power grid. China has been vocal in its willingness to redress the balance and the IFC says that it is keen to support the endeavour.

“This investment will help China Gas to expand its natural gas distribution network, an expansion that is expected to provide millions of households, industrial and commercial users with access to natural gas, a clean and affordable form of energy, to replace the conventional more polluting and carbon intensive fuels, such as coal, diesel and gasoline.

“Natural gas accounts for about 50% reduction in greenhouse gas emissions relative to coal in electricity generation, and its use in the transportation sector reduces particulate emissions by 70-90%.  This will help improve the air quality in Chinese cities,” Crist said.

The IFC contributed US$86m from its own book and syndicated a US$64m portion to the commercial sector. The rest of the finance – US$150m – was arranged and underwritten by RBS and syndicated to 19 commercial banks.

IFC’s global vision and sector expertise made this multi-party financing package possible. Liu Ming Hui, China Gas

GTR can reveal that the full list of lenders is as follows:

Mandated lead arrangers: Hana Bank, Bank of Baroda, BTMU, BPI Capital, Commonwealth Bank of Australia, First Gulf Bank, Intesa Sanpaolo, Kookmin Bank, Korea Development Bank, State Bank of India, SMBC, RBS.

Lead arrangers: BNP Paribas, Shinhan Bank, Woori Bank,

Arrangers: Aozora Bank, BOT Lease Co.

“IFC’s support provides us with the necessary capital to pursue our expansion plans, including investment in more than 30 new city-gas projects and the construction of 200 natural gas stations every year,” said Liu Ming Hui, President of China Gas. “IFC’s global vision and sector expertise made this multi-party financing package possible.”