UN pact to improve energy efficiency
By Wang Ying (China Daily)
Updated: 2005-11-08 06:13

The United Nations Development Programme (UNDP) and Arcelor, the world's second-biggest steel maker based in Europe, yesterday signed a Memorandum of Understanding (MOU) to strengthen public-private partnerships and promote sustainable development in China.

China is the first country where Arcelor has made such a pact with the UNDP for the promotion of energy and environmental sustainability, a joint statement by both sides said.

Through a two-year framework of co-operation, UNDP and Arcelor will work together to improve energy efficiency through enhanced policy and a legal framework. They will also facilitate the implementation of the Kyoto Protocol's Clean Development Mechanism to address environmental issues such as reducing greenhouse gas emissions.

The partnership will also look at the promotion of public-private partnerships in China as a tool for poverty reduction with a focus on energy and the environment, in the provinces of Shandong, Jiangsu, Qinghai and Sichuan.

Arcelor has planned an investment of US$2 million for the partnership projects with UNDP in China, Guy Dolle, chief executive officer (CEO) to the steel giant, told yesterday's signing ceremony in Beijing.

Luxemburg-based Arcelor SA will use its technical know-how and expertise to help China improve environmental standards and energy efficiency. This might include some "technology transfer" to local steel companies in China, said Dolle.

Renaud Meyer, deputy resident representative of UNDP China, yesterday said the partners will hold further talks in the coming weeks to identify when they can start their co-operation.

"We believe that this new co-operation mechanism will provide a strategic approach in partnering with the private sector in China, where there is considerable potential for fundraising for UNDP's initiatives aiming at promoting sustainable development," said Alessandra Tisot, senior deputy resident representative of UNDP China.

"Arcelor is very keen to support UN development projects in China, with a focus on energy and environment protection in particular," Dolle said.

Industry analysts said the partnership will also help smooth the way for Arcelor to gain a footing in China's steel sector. Last month the firm witnessed its rival, the Netherlands-based Mittal, take over shares of a Chinese steelmaker.

"That (the partnership between Arcelor and UNDP) might as well be viewed as part of their branding efforts to create a good public image in the market," said Zhou Xizeng, senior steel analyst with Beijing-based CITIC Securities.

Arcelor remains committed to the Chinese market, although the Chinese Government earlier this year laid out a steel industry policy preventing foreign firms from taking a majority stake in any Chinese steel firm, said Dolle.

The transnational steelmaker, with a turnover of 30 billion euros (US$36 billion) last year, is looking at new business opportunities in China, which also include M&As (mergers and acquisitions), according to company sources.

With the Shanghai-based Baosteel and Nippon Steel, the firm will today announce the opening of a joint venture making steel for cars, in which Baosteel will own 50 per cent and Arcelor 12 per cent.

Talks with Laiwu Steel Group in East China's Shandong Province over possible share takeover are still in progress, Dolle told China Daily.

(China Daily 11/08/2005 page10)