Shanghai will arrange 10 billion yuan (US$1.57 billion) of "green credit" with 10 banks to back energy conservation.

The lenders, including Shanghai Pudong Development Bank and Bank of China, will sign an agreement next week with an alliance of local energy service companies for the green credit to be used in energy performance contracting, Shang Yuying, vice director of the Shanghai Commission of Economy and Information Technology, said yesterday.

In energy performance contracting, an energy service company provides a range of solutions, including design and implementation of energy saving projects, energy infrastructure outsourcing, and power generation for building occupants, who pay a fee that's below the benefit, or savings, gained.

The loan arrangement will be part of events for the annual energy saving promotion week which starts on Sunday.

Shang said the city's industrial sector's energy saving potential is "not very big" because it's among the most efficient across China.

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