NewChina's energy efficiency efforts stymied by lack of established players

Favourable government policies and rising pressure to cut costs are encouraging mainland building and factory owners to improve their energy efficiency, but few of the firms they can turn to for such equipment and services have long track records.

The sector, dotted with small players, is constrained by access to funding, which is important since much of its revenue comes from energy management contracts, where providers pay for the equipment and recoup their outlays and earn profits from clients' savings on future energy bills.

"The [energy efficiency management] market is still at an early stage of development," said William Beloe, programme manager for International Finance Corp's (IFC) China utility-based energy efficiency finance programme.

"While the number of registered energy service companies has already fallen from close to 5,000 to around 3,200, there are still only around 20 that have developed a meaningful track record and sizeable businesses."

IFC is a member of the World Bank Group, which focuses on financing private sector development in emerging markets.

Beloe said his programme has worked with around seven private sector mainland banks to help increase their lending to energy efficiency and clean energy projects, by helping them find suitable projects, providing technical advice and introducing them to industry consultancies.