Support for the Implementation of an Environmental and Social Management System (ESMS) for the Green Investment Fund (GIF)

Huangshan Municipality, Anhui Province, People’s Republic of China, 2023

Client: KfW and Asian Development Bank

Role: Environmental and Social Management System Consultant

Project Background and Objectives

KfW and the Asian Development Bank co-financed the Anhui Huangshan Xin’an River Ecological Protection and Green Development Project to improve water quality and ecological conditions in the Xin’an River Basin while promoting green economic development. Under Project Output 3, a Green Investment Fund (GIF) was established to provide financing to environmentally friendly business and service sectors, including green agriculture and eco-tourism, targeting small and medium-sized enterprises (SMEs) in Huangshan Municipality.

The objective of this assignment was to support the effective implementation of an Environmental and Social Management System (ESMS) for the GIF, ensuring that fund operations align with international environmental and social standards and lender requirements.

SIET’s Role and Services

SIET was engaged to provide hands-on advisory support to Huangshan Trust Investment Company (HTIC), the fund manager, focusing on the practical implementation of the ESMS. Key activities included:

  • Review and evaluation of existing environmental and social risk management procedures
  • Assessment of HTIC’s transaction cycle and investment decision-making processes to tailor ESMS implementation to institutional needs
  • Support in conducting environmental and social due diligence and impact analysis for GIF-supported investments
  • Development of an ESMS action plan to address identified gaps and strengthen system effectiveness
  • Assistance with monitoring and management of environmental and social risks during project implementation

Outcomes and Value Added

SIET worked closely with HTIC management and staff responsible for ESMS implementation, providing targeted, transaction-oriented guidance rather than purely theoretical system design. The assignment strengthened HTIC’s capacity to identify, assess, and manage environmental and social risks associated with green investments, supporting compliant, responsible, and sustainable operation of the Green Investment Fund.