Stockholm (NordSIP) – Iceland’s Arctic Green Energy Corporation signed a deal last week that will provide its clean geothermal heating solutions to Xiong’an, a regional megacity of 15 million people in the People’s Republic of China, some 100 km south of Beijing in Hebei Province.
The Asian Development Bank (ADB) will provide $250 million in loans to the Arctic Green Energy Corporation (AGE) and Sinopec Green Energy Geothermal Limited (SGE) to expand environmentally sustainable district heating services in China. Sinopec GEGL is a joint venture established between the Arctic Green Energy Corporation and Sinopec Star, a subsidiary of China’s state-owned oil giant Sinopec Group.
“This is a landmark project for Asia. Our partnership [with] Iceland, a country whose own energy system shows the potential of geothermal, will deliver much-needed energy solutions that promote truly sustainable development,” said Diwakar Gupta, ADB Vice-President for Private Sector and Co-financing Operations.
The deal represents the largest ever for the Nordic country, which is a global leader in geothermal technology. Geothermal district heating extracts thermal energy from beneath the surface of the earth and delivers it to homes and businesses through reserved pipelines, which offers an alternative to coal and gas and has zero emissions.
It is hoped that this arrangement will open more growth markets for Arctic Green Energy Corporation to export its geothermal expertise in Asia.
“How cities are heated or cooled in the 21st century will determine the outcome in the fight against air pollution and greenhouse emissions,” said SGE Vice Chairman and AGE Chairman and Founder Haukur Hardarson. “The funding from ADB enables AGE and SGE to significantly expand in the fight against air pollution while providing much needed clean heating to the citizens in the PRC. We see ADB as a long-term strategic partner and look forward to work also with other countries in Asia such as Kazakhstan.”
Coal-based heating is one of the major causes of air pollution in the People’s Republic of China.