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The introduction of eco-environment-oriented development, otherwise known as EOD, has enabled governments at various levels to further their efforts at simultaneously pursuing economic growth and environmental protection by reducing the debt load on local authorities.

The development mode, first introduced in 2018, has helped to alleviate the financial burden on governments by extending credit lines from a range of banks for them to continue their pursuit of sustainable development without requiring direct investment from the government.

In October, an EOD project in the county-level city of Zhuanghe, administered by Dalian in Liaoning province, centered on improving the city's water quality and fishing industry, secured a 20-year credit line of 1.26 billion yuan ($176.8 million) from the Agricultural Development Bank of China.

This was the first EOD project in Liaoning province to receive bank financing, according to the Liaoning Department of Ecology and Environment.

"After completion, it will effectively improve the water quality of the Qingduizi Bay coastal waters, providing favorable environmental conditions for the construction of the nearby fishery economic zone," said Zhang Jixin, president of Dalian North Yellow Sea Industrial Development Group Co, the undertaker of the project.

The "Dalian Zhuanghe water environment comprehensive improvement and fishery economic zone construction EOD project" aims to achieve a mutually beneficial integration of industrial development and ecological environment governance, he added.

The project passed the review by the Ministry of Ecology and Environment in June last year and stands as the first marine ecological environmental governance EOD project in northern China.

A unique feature of the EOD development mode is that it integrates profitable business programs with environmental projects that yield limited economic returns. The profits from the businesses involved are reinvested in the environmental programs to strike a balance between development and conservation.

"By integrating social capital, special subsidies and policy-based finance, among other resources, the efficiency of project financing has been significantly enhanced," said Zong Jichuan, dean of the School of Finance at Dongbei University of Finance and Economics.

"It breaks away from the traditional development model of heavy financing and heavy debt issuance, shifting toward a market-oriented approach to regional comprehensive development. This approach not only protects the environment but also alleviates government financial pressures," he said.

The Ministry of Ecology and Environment has established cooperative relationships with financial institutions such as the China Development Bank, the Agricultural Development Bank of China and the National Green Development Fund to facilitate precise financial investment for this type of development.

Data from the ministry shows that as of last year, it had cumulatively submitted 229 EOD projects to financial institutions, with a total investment of 971.8 billion yuan and financing needs of 682.8 billion yuan. A total of 201.2 billion yuan has been credited.

With a total investment of 1.6 billion yuan, the EOD project in Zhuanghe includes four subprojects: the comprehensive management of riverine ecological environments; rural domestic sewage treatment; comprehensive treatment of livestock and poultry manure pollution; and the first-phase project of the Dalian North Yellow Sea Fishery Economic Zone.

"When designing the project, we tailored it to local conditions by integrating industry and environmental governance," said Li Baitao, deputy director of the Zhuanghe ecological environment bureau.

Since the project's inclusion in the national EOD database, the bureau coordinated with the Zhuanghe branch of the Agricultural Development Bank of China. Through in-depth communication and cooperation among the government institutions, local enterprises and the bank, efforts were made to advance the implementation of the project, Li said.

With the project financed and underway, the comprehensive treatment of livestock and poultry manure pollution elements is already 15 percent completed.

"Zhuanghe is a major area for raising poultry and growing blueberries and strawberries. This subproject is a good example of tailoring solutions to local conditions," Li said.

The subproject uses poultry and livestock manure from Zhuanghe as the main raw material to produce organic fertilizer for local blueberry and strawberry plantations, he explained.

According to Li, the first-phase of the subproject can collect and treat 300,000 metric tons of livestock and poultry manure annually, along with 85,000 tons of agricultural straw waste.

It can also produce various types of fertilizers totaling 135,000 tons per year, including 30,000 tons of granular organic fertilizer and 30,000 tons of granular bio-organic fertilizer.

Li said that the bureau will accelerate the implementation of the EOD project in accordance with the requirements of the local government, aiming to establish it as a new benchmark for marine EOD projects in the province and even nationwide.

In recent years, the Liaoning Department of Ecology and Environment and the Dalian Bureau of Ecology and Environment have followed the national policy orientation and promoted the planning and application for EOD projects.

The Dalian bureau, together with the Dalian Development and Reform Commission and the Dalian branch of the China Development Bank, have issued a work plan to promote the EOD mode, organizing training and guidance.

According to Zhou Qiang, director of the science and finance department of the Dalian bureau, the EOD project for the ecological restoration and integrated development of an abandoned limestone mine in the city was entered into the national EOD project database last year.

He said that such projects should focus on problem-solving, emphasizing that bigger investments are not necessary, and that smaller, more refined approaches yield better results.

Zhou added that the original planned investment for the limestone mine project was 4.67 billion yuan, but that adjustments are being made to optimize and reduce the amount of investment needed.

Addressing funding

As the country strives to address the underfunding of environmental conservation, a series of policies have been introduced in recent years to support and encourage the exploration and practice of EOD projects at both national and regional levels.

The Ministry of Ecology and Environment, the National Development and Reform Commission, the People's Bank of China and the National Financial Regulatory Administration released a guideline for promoting EOD in December.

Financial institutions will be encouraged to explore financial products and services that cater to the characteristics of EOD projects, the guideline said. They will also streamline the procedures to examine and approve loans for EOD projects and introduce preferential policies for them.

So far, provinces such as Anhui, Zhejiang, Fujian, Jiangsu and Shandong are conducting provincial-level EOD pilot projects.

In Jiangsu province, priority has been given to EOD projects with support such as "environmental protection loans" and "environmental protection guarantees", with financial rewards provided by the provincial government.

Provinces such as Anhui and Fujian have been inclined to support EOD projects through green finance, prioritizing the provision of necessary resources.

In Rizhao, Shandong province, the Rizhao Reservoir is surrounded by mountains, with a lakeside greenway that runs along the reservoir, creating a picturesque scene.

The beauty of this area can be attributed to the implementation and construction of an EOD project in the reservoir basin.

With a total investment of 2.39 billion yuan, the project focuses on the overall development of the reservoir basin.

The project aims to establish a distinctive industrial circle comprising an ecological aquaculture sector, an ecological tourism sector and a technology demonstration sector.

The project has set up a beneficial mechanism that subsidizes industrial profits to support ecological environmental inputs, paving the way for a green development approach that benefits production, livelihoods and the ecology.

The Rizhao Reservoir is a primary water source for local residents. In the past, issues such as agricultural pollution in the basin and upstream water influences led to damage to the reservoir's aquatic ecosystem, preventing stable water quality.

"The EOD mode extends the industrial chain, combines development and operates jointly to enhance the operational profits of related industries through ecological environmental governance," said Song Jun, director of the Rizhao bureau of ecology and environment.

"It feeds back the enhanced industrial value to ecological environmental governance inputs, achieving innovative project organization methods," he said.

The implementation of this EOD project aims to establish a distinctive eco-industrial zone featuring ecological agriculture, aquaculture and tourism.

"The project adopts an organic planting model that excludes pesticides, fertilizers, plastic film, herbicides, artificial hormones and genetically modified seeds," said Qin Lyu, deputy manager of Rizhao Water Affairs Group's Ecological Technology Development Co.

This comprehensive approach has enabled a transition from "beautiful ecological value" to "high-quality economic benefits", said Qin, adding that products such as hazelnuts, apples, tea, crucian carp, quinoa and wheat from the Rizhao Reservoir basin have all obtained national organic certification.

Through the development of ecological agriculture, Rizhao is achieving a win-win situation where ecological protection and the realization of ecological product values go hand in hand, Qin said.

The Rizhao Reservoir EOD project has been focused on creating a comprehensive governance demonstration area for mountains, waters, forests, fields, lakes and grasslands, and a strategic experimental area for rural vitalization, he added.

Zong from Dongbei University of Finance and Economics said that, from the perspective of the implementation of EOD projects nationwide, there are still aspects that need improvement. For example, in the implementation process there is a need to be cautious about tendencies toward homogenization.

Different regions should tailor their implementation plans according to their local ecological environment, industrial structure and economic foundation, integrating unique resources to build suitable ecological industrial chains, he said.

"Project advancement should proceed gradually, following a scientific planning approach and steady implementation to avoid resource wastage while enhancing resilience against risks, ensuring the sustainable development of the EOD mode," Zong said.