China to encourage loans for energy-efficient companies

China, the world’s second-biggest oil consumer, will limit loans for industries that are heavy users of energy to reduce waste and improve environmental protection.

Banks will be ordered to restrict lending to companies that pollute, the central bank said on its Web site Friday. Financing will be encouraged for companies with innovative technology that allows increased energy efficiency, the People’s Bank of China said, without giving any details on timing.
The country wants to avoid a repeat of last year, when it missed a government target to cut the amount of energy used for each unit of gross domestic product. Prime Minister Wen Jiabao said June 14 that the economy faced “prominent” problems, including the pace of growth in factory output and energy conservation challenges.

“Restricting loans to high energy-consuming, high polluting industries will help control over investment and prevent overcapacity,” the central bank said.

International Herald Tribune