Recently, the Ministry of Ecology and Environment, the National Development and Reform Commission, the People's Bank of China and the State Administration of Financial Supervision jointly issued the Implementation Guidelines for Eco-Environment Oriented Development (EOD) Projects (Trial) (hereinafter referred to as the "Implementation Guidelines").
So, friends are asking: what is EOD, what is EOD project library, which can be packaged as EOD projects, which can't be used as EOD projects, how to apply for EOD projects, and so on.
1. What is EOD?
EOD，即生态环境导向的开发，英文是Eco-environment Oriented Development，简称EOD。
To put it simply, EOD is to package environmental governance projects that have no direct benefits with industrial projects with better returns, and use the income of industrial projects to feed back the investment in environmental governance projects.
The definition of the EOD model in the "Implementation Guidelines" is Xi to promote the effective integration, value-added feedback, overall promotion, market-oriented operation, and integrated implementation of ecological environment governance with strong public welfare and related industries with better returns through industrial chain extension, combined development, and joint operation through industrial chain extension, combined development, and joint operation. Sustainable operation, an innovative project organization and implementation method that improves the operating income of related industries with ecological environmental governance, feeds back the investment in ecological environmental governance with industrial value-added income, and realizes the internalization of the external economy of ecological environmental governance.
In short, the EOD model is a project practice that practices the concept that lucid waters and lush mountains are invaluable assets, which is conducive to actively and steadily promoting the operation and development of ecological products and promoting the effective realization of the value of ecological products.
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Part 2: What is EOD Project Library?
The term "EOD project library" began with the "Guidelines for the Inclusion of Ecological and Environmental Protection Financial Support Project Reserves (Trial)" (Huanban Kecai [2022] No. 6) issued in April 2022.
The conditions for warehousing should be combined with the key tasks of ecological and environmental protection in the "14th Five-Year Plan" in the region, and major projects that have a strong supporting role in pollution prevention and control, strong implementation necessity, good implementation foundation and significant environmental benefits should be selected to enter the project reserve.
3. What can be packaged as an EOD project?
In the Guidelines for the Inclusion of Ecological and Environmental Protection Financial Support Project Reserves (Trial), it is clarified that EOD projects include eight major areas: air pollution prevention and control, water ecological environmental protection, comprehensive treatment of key sea areas, soil pollution prevention and control, agricultural and rural pollution control, solid waste treatment and disposal and comprehensive utilization of resources, ecological protection and restoration, and other environmental governance.
In the just-issued "Implementation Guidelines", the content of ecological environment governance is specified in detail, including comprehensive treatment of water ecological environment in river basins, protection and restoration of lake and reservoir water ecological environment, protection of water conservation areas, protection of drinking water sources, remediation and standardized construction of river outlets, comprehensive improvement of rural environment, control of agricultural non-point source pollution, environmental remediation of coastal waters, restoration of historical soil pollution lost by no owner or responsible entity, prevention and control of mine pollution, treatment and disposal of solid waste, treatment and disposal of new pollutants, conservation of biodiversity and restoration of ecosystems, Noise and vibration pollution control, pollution reduction and carbon reduction collaborative management, etc.
4. What can't be used as an EOD project?
In the just-released Implementation Guidelines, it is clarified that eight types of projects shall not be included:
First, non-public welfare ecological environment governance content such as mine governance, soil and groundwater pollution risk control and restoration, and "three simultaneous" environmental protection facilities within the scope of corporate responsibility shall not be included.
Second, water system connection projects that are only for the purpose of water diversion and water resource utilization shall not be included.
Third, projects that only have no substantive ecological environment governance content, such as river dredging, flood control dams, slope maintenance, landslide control, and landscape greening, shall not be included.
Fourth, it does not conform to the principles of forest, irrigation, grass, wetness, barrenness, and sand, violating the laws of nature, using a large number of non-native plants or introducing invasive alien species, dislocation restoration, and excessive restoration, shall not be included.
Fifth, projects with large implementation scale, long cycle, many uncertain factors, and large policy risks such as comprehensive development of the area, remediation of polluted sites + in-situ development projects, etc., shall not be included.
Sixth, urban domestic sewage and garbage treatment facilities shall not be included.
Seventh, capacity building such as ecological environment monitoring and supervision, and buildings and halls shall not be included.
Eighth, work tasks such as ecological environment investigation and assessment shall not be included.
5. How to apply for EOD projects?
There are three main steps in the declaration of EOD projects, namely project packaging and planning, project review and storage, credit and loans.
1. Project packaging and planning
According to the requirements of the Ministry of Ecology and Environment's "Pilot Implementation Plan for Eco-Environment-Oriented Development (EOD) Model", places that intend to apply for EOD projects must first prepare the "EOD Project Implementation Plan" and carry out warehousing declaration. At this stage, the core is to carry out the preparation of the EOD project implementation plan.
2. Project review and warehousing
Pass the preliminary review of the project at the city and county levels, and submit it to the provincial department of ecology and environment and other departments for review. Generally, it includes four links: form verification, expert guidance, on-site investigation, and expert review, and the project is selected according to specific standards and approved for storage. At this stage, the core is to pass the expert review.
3. Project credit and loans
After entering the warehouse, the bank will conduct an assessment from the perspective of whether there is a repayment risk, focusing on cash flow and assets, the qualifications of the borrower, the content of the construction project, and the financial performance of the market. At this stage, the core is to optimize the plan according to the communication with the bank.
EOD Project Flow Chart
6. Precautions for applying for EOD projects
1. Declaration size
In principle, the total investment of EOD projects with the prefectural and municipal governments at or above the prefectural level as the main body of the application shall not be higher than 5 billion yuan.
In principle, the total investment of EOD projects in which district and county-level governments are the main body of application shall not be higher than 3 billion yuan.
2. Reporting entity
First, it is necessary to ensure that the project implementation unit is only one market entity
Second, it is necessary to ensure that the environmental protection credit evaluation is not the lowest level
Third, we must ensure that the main business scope should include the ecological and environmental protection industry
3. Content Requirements
First, it should be noted that the relying project must have completed the project feasibility study approval or filing and other project approval work
Second, it should be noted that there are no more than 5 children in a single item
Third, we should pay attention to: strengthen the integrated implementation of ecological and environmental governance projects with strong public welfare and poor profitability and related industries with good returns.
4. Financial Requirements
First, it should be explained that the overall income and investment of the project can be balanced.
Second, it should be explained that if the compliance requirements are met, if the government does not form hidden debts, the return subsidies such as land transfer income, taxes, and expected new fiscal revenues will not be used as project income.
Third, it should be explained: it does not involve government payment during the operation period.
7. Advantages of EOD projects
1. Promote the realization of the value of ecological products
On the one hand, the environmental governance investment can be fed back with the income of industrial development, which reduces the investment pressure of the government, and on the other hand, it can bring better air, soil, water, etc. through environmental governance, and promote the realization of external benefits brought by the value of ecological products, thereby bringing opportunities for the high-quality development of the regional economy.
2. Financial subsidies are available
In November 2021, the Ministry of Finance issued the "Measures for the Management of Funds for Key Ecological Protection and Restoration", which clearly stated that "the awards and subsidies for the integrated protection and restoration of mountains, rivers, forests, fields, lakes, grasses, sand and ice projects shall be allocated by the project method, with a total investment of 1 billion to 2 billion yuan to be 500 million yuan, 2 billion to 5 billion yuan to be compensated for 1 billion yuan, and 2 billion yuan for more than 5 billion yuan".
For EOD projects with an investment of 5 billion yuan, the proportion of the highest project award and subsidy funds can reach 40%, and the amount will reach 2 billion.
3. The financing advantage is more significant
First of all, the EOD model enjoys a lower loan interest rate and can obtain preferential terms through industry interest discounts and policy bank loans.
Secondly, the EOD model has a longer loan period, up to 30 years, which provides longer-term financial support for the project.
Third, the EOD model financing amount is also relatively large, up to billions.
In short, banks can provide large-scale medium and long-term financing services for EOD projects, and a single EOD project can obtain a subsidized loan of up to 80% of the project investment amount and up to 30 years.
By the end of 2021, CDB's cumulative credit line for the first batch of EOD pilot projects reached RMB52 billion.
4. The project landing time is fast
From the perspective of work practice, the early application time of EOD projects is relatively short, and the implementation is relatively fast, from the planning and packaging of the project to the approval of warehousing, and then to the financing landing, the average cycle is about 6 months.
8. The development of EOD projects
At present, the development of EOD projects in mainland China is still in the pilot stage.
In September 2020, the Ministry of Ecology and Environment, the National Development and Reform Commission, and the China Development Bank jointly issued the Notice on Recommending Pilot Projects for Eco-Environment-Oriented Development Models, kicking off the pilot work of the EOD model.
In April 2021, the three departments issued the Notice on Agreeing to Carry out the Pilot of the Eco-Environment-Oriented Development (EOD) Model, agreeing to carry out the pilot work of the EOD model for 36 projects.
In April 2022, the three departments jointly issued the "Notice on Agreeing to Carry out the Second Batch of Eco-Environment-Oriented Development (EOD) Model Pilots", agreeing to carry out pilot projects for 58 projects.
In April 2022, the Ministry of Ecology and Environment (MEE) issued the Guidelines for the Warehousing of Ecological and Environmental Protection Financial Support Project Reserves (Trial), and the management system for ecological and environmental protection financial support projects was officially put into operation.
The function of the ecological and environmental protection financial support project management system is to carry out project information reporting, docking, feedback, improvement and other work, and push the projects that meet the relevant requirements of the EOD model to relevant financial institutions.
This marks the change of the EOD program from a working method of issuing documents once a year and centralized selection to a way of "mature one, reporting one".
On October 21, 2022, at the fifth press conference of the 20th National Congress of the Communist Party of China, Zhai Qing, member of the Party Leadership Group and Vice Minister of the Ministry of Ecology and Environment, mentioned that since 2018, the Ministry of Ecology and Environment has vigorously developed green finance and promoted the innovation of eco-environment-oriented development models.
In December 2023, the Ministry of Ecology and Environment, the National Development and Reform Commission, the People's Bank of China, and the State Administration of Financial Supervision and Administration jointly issued the Guidelines for the Implementation of Eco-Environment-Oriented Development (EOD) Projects (Trial) to further guide and regulate the planning, design, implementation, evaluation, supervision and other activities of EOD projects.
In addition, ecological and environmental departments at all levels have worked closely with financial institutions to promote green development.
For example, Jiangsu Province gives priority to EOD projects to provide "environmental protection loans" and "environmental protection" support, and the provincial finance provides financial incentives.
Anhui, Fujian and other provinces have given preferential support to green finance for EOD projects, giving priority to factor guarantees.
Guangxi has developed the "Guihui Loan-Ecological Loan", with an interest discount ratio of 3% for one year, with a maximum discount of 5 million yuan.
Source: Environmental Science