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| Description of company and purpose of project |
| Established in 1993, Xinao Gas Holdings Limited is a leading Chinese private gas distributor with operations in 39 cities across 10 provinces / municipalities in eastern China. Its operations cover a total connectable urban population of 18.5 million people. Xinao is also developing natural gas applications for the transportation sector, including conversions of taxis and buses to CNG and the installation of CNG fueling stations. The project is for Xinao to expand its gas distribution infrastructure to increase gas distribution and utilization in China. |
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| Project sponsor and major shareholders of project company |
| Xinao Gas Holdings Limited is listed on the Hong Kong Stock Exchange with a market capitalization of approximately $463 million equivalent as of March 1, 2004. Xinao’s Co-founder and Chairman Mr. Wang Yusuo and his wife Ms. Zhao Baoju own approximately 49% of Xinao’s shares. The balance is owned by the public. |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $166 million. IFC is exploring a possible cooperation with the company to finance part of this expansion program. |
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| Location of project and description of site |
| Xinao’s 39 operating locations are located in provinces of Liaoning, Hebei, Shandong, Henan, Jiangsu, Anhui, Zhejiang, Hunan, and Guangdong, and the Beijing Municipality. As of June 30, 2003, Xinao’s operating companies have 1,291 km of distribution pipelines and 28 gas processing stations. |
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| Project Development Impact and IFC's Role |
The project supports China’s stated policy to develop the natural gas industry. The project would help Xinao develop gas distribution infrastructure and gas utilization in cities in northern and eastern China, where the growth in gas consumption is expected to be the highest.
Substituting coal energy with natural gas is an effective means of reducing air pollution. Combustion of natural gas results in virtually no atmospheric emissions of sulfur dioxide and particulates, and far lower emissions of other harmful pollutants such as nitrogen oxides (which contributes to urban smog) and carbon dioxide (the main contributor to global warming).
IFC has a strong role in supporting the development of private infrastructure companies whose product results in significant environment and economic benefits by reducing harmful emissions, alleviating air pollution (a major health issue in China) and lowering energy costs. IFC would also be supporting a local Chinese gas distributor which competes with other local and international operators. This will have a strong demonstration effect and lend credibility to other local firms seeking international funding in the Chinese gas distribution market as well as the broader infrastructure market. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising information submitted by the project sponsor and a report prepared by a technical consultant to IFC. The review addressed the compliance status of Xinao's current operations as well as its management system for the environmental, social, and safety aspects of its current and future operations. The company's procedures for land acquisition and how liabilities such as land contamination and labor obligations are managed were reviewed. Opportunities for social responsibility and community development programs were also assessed.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The environmental documents will be made available at the following locations:
Shijiazhuang Xinao Main office of Shijiazhuang Xinao
No. 558 Heping East Road, Shijiazhuang China
Postcode: 050810
Shijiazhuang, Hebei Province
Bengbu Xinao Main office of Bengbu Xinao No 1306 Huaihe West Road Bengbu China
Postcode: 233000
Bengbu, Anhui Province
Xiangtan Xinao
Main office of Xiangtan Xinao
No. 113 Yuhu Road
Postcode:411100
Xiangtan, Hunan Province |
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| To contact the project company, please write to: |
Mr. Yu Jian Chao, Finance Director
Xinao Gas Holdings Limited
Hua Xiang Road of Langfang
Economic & Technical Development Zone, Hebei
P.R. China
Phone: 86-316-607-9977
Fax: 86-316-608-0999 |
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