Natural Capital Investment
Background of Fund Establishment
The deteriorating environment pollution like air and water pollution as well as ecological degradation are making environmental improvement top of the agenda. In sustainable development, the Chinese government proposed the development of economy ecological efficiency as a response to the pollution, but it is bottlenecked by funding gap. Engagement of more social capital with common targets will be necessary for the ongoing project.
State Policy Orientation
The State Council released ‘Guidelines on Mobilizing Social Capital in Financing Key Innovative Areas’ on Nov. 26, 2014. It encourages private capital to establish industry investment fund investing in ecological and environmental areas through private equity. Government can give support by subscribing to funds with fiscal resources like funding within central fiscal budget.
With the above-mentioned conditions and favorable policies, DeTao, as the sponsor, establishes Green Stamp Environmental Project PPP Fund, mobilizing social capital in contributing to environmental protection with practical efforts. Aided by advisors from environmental protection and financial sector, an investment decision-making committee will be established under the fund. The committee is composed of specialists from those two areas. The environment projects that the fund invests in will be subject to investment analysis and professional approval by the committee to ensure that they both find solutions to current environmental problems and bring reasonable returns to social capital, preserving both natural and financial wealth.
Major Investment Areas
In collaboration with governments across regions, investment will be made in river, forest, river, ocean, and other environmental projects relating to ecological efficiency. Such investment will find solutions to local environmental problems, boost tourism, the real estate market, agriculture, among other major industries, and bring growth to both natural capital and economy.