|Environmental Technologies Industries
|China Environmental Export Market Plan|
|Chapter 9 - Finance Programs and Resources|
|Box 9 Opening Doors Through Co-financing and Concessional Funding |
The initial outlay of funds by bilateral government organizations to assist development and environmental protection in China can generate contracting opportunities and financing for private investors. Most bilateral assistance is tied to contractors in the country of origin and helps facilitate the development of a market presence that over time may lead to further contracts. Bilateral spending can open channels by which to tie outside funding to contractors that are nationals of the bilateral's origin. In China, where relationships are of great importance, spending to enhance domestic initiatives (such as Canada's spending in support of the China Council for Sustainable Development) has built relationships that have created well-established inroads. Except for the United States, every major donor country engaging in development assistance throughout the world is active in China. The United States has several small-scale operations, such as the Trade and Development Agency (www.tda.gov); however, no U.S. program in China compares to the programs of such countries as Germany, Australia, Canada, and others in terms of scale, financial capacities, or overall impact.
Bilateral assistance agencies that co-finance operations with the World Bank and the ADB are essentially able to tie entire
loan packages for technical assistance projects to consultants and technology providers from their own countries. Technical assistance projects through the ADB often draw grants in the neighborhood of $750,000. Bilateral assistance agencies can cover a portion of such loans in the form of a grant, equaling, for instance, $300,000. In doing so, the bilateral can take over procurement operations for the project and source equipment, consultation, and management training, entirely from its own country, in essence transforming the entire $750,000 (the $450,000 grant from the multilateral and the $300,000 grant from the bilateral) into tied financing. Bilaterals engaging in such co-financing operations have created contracting opportunities for private enterprises in their respective countries, generating revenues several times the outlay of the original grant.
The Canadian government has financed both the first and second five-year budgetary rounds of the China Council for
Sustainable Development, each equaling investment of around $5 million. The China Council for Sustainable Development's
purpose is to maintain high-level consultation on sustainable development between the Chinese government and representatives of governments, donor agencies, and multinational corporations. Through its significant financial and administrative involvement with the council, the Canadian government has provided a tremendous inroad for private Canadian firms. In this way, a country with a relatively small development budget has facilitated good will and private sector contracts for its national industries far exceeding its original investment.