BEIJING, March 26 Banks in China's smog-hit
Hebei province last year turned down loan applications worth
12.3 billion yuan ($2.0 billion) in order to comply with new
"green credit" policies designed to cut funding to polluting
Banks in Hebei have been under instruction to deny credit to
projects that will add capacity in restricted industries like
steel, cement and glassmaking, according to a report in China
Environmental News, a publication of the country's Ministry of
Banking sources told Reuters earlier in March that banks
have cut lending to bloated, polluting industries like steel and
cement by as much as 20 percent.
Citing figures from Hebei's banking regulators, the report
also said banks in the province lent a total of 18.26 billion
yuan to energy saving projects over 2013, and another 42.64
billion yuan on technological upgrades.
Banking regulators have issued blacklists to lenders in the
province to make sure firms that violate environmental rules are
not granted credit, it said.
Tighter lending rules have added to the credit crunch
affecting Hebei's steel mills, many of which have been
struggling to find the cash to buy raw materials and pay wages.
At least 16 steel firms in Hebei have now stopped producing,
governor Zhang Qingwei said earlier this month.
"The performances of these enterprises have been poor and
because their ability to survive is in question, and because of
severe pollution, the government doesn't let the banks lend to
them," Zhang Wuzong, president of private steelmaker Shandong
Shiheng Special Steel told Reuters earlier this month.
"These two factors mean that they will inevitably close."
($1 = 6.2024 Chinese Yuan)
(Reporting by David Stanway; Editing by Richard Pullin)