A wave of ripples, ten years of guardianship: Industrial Bank's financial lifeblood nourishes the Yellow River banks

On the southern edge of the Mu Us Desert, a half-century-long ecological revolution is rewriting the fate of the desert. The once-flowing sea of sand has vanished, replaced by green-covered dunes and lush forests—making the Mu Us Desert the world’s first desert on the verge of “disappearing.” At the junction of this oasis and the yellow earth, the Wanggedu Reservoir flows like a blue ribbon, quietly guarding the lifeblood of Yulin, the energy city.

This water conservancy project, carrying the hopes of people’s livelihoods and ecological missions, has risen from blueprint to reality thanks to the financial relay and green finance innovation of the Yulin branch of Industrial Bank (601166.SH) over the past decade and through three leadership teams. Zhang Weigang, the party secretary and president of the branch, emphasized: “Supporting the Wanggedu Reservoir project is a strategic choice for Industrial Bank to practice the ESG concept and actively respond to climate change.”

Through innovative financial services of “revenue right collateral + group guarantee,” the financial vitality injected by Industrial Bank has transformed a reservoir initially dedicated to single industrial water supply into a “lifeline” that nourishes a million residents, supports agricultural and industrial development, protects green homes, and combats surrounding desertification.

The thirst for livelihoods: from “drinking with water scarcity from the Yellow River” to nourishing with fresh water

“In the past, Yulin really was ‘drinking with water scarcity from the Yellow River!’” A relevant leader from the Yulin Water Group Wanggedu Reservoir Co., Ltd. expressed the deep pain of this resource-rich city.

Yulin is rich in coal and oil and gas resources, but it has long been shrouded in a severe shortage of water. Industrial development is limited, agricultural irrigation is difficult, and there are serious concerns about residents’ drinking water safety, with millions of tons of silt flowing into the Yellow River each year, becoming a “pain point” for ecological management in the basin.

Faced with this predicament, the Wanggedu Reservoir has been entrusted with heavy responsibilities. This “super water tank,” with a total storage capacity of 389 million cubic meters and a flood control standard of once in a thousand years, has a designed annual water supply capacity of 150 million cubic meters. However, how can this blueprint be realized? The massive investment and long repayment periods are like two mountains looming ahead. “Unlike traditional energy projects that are ‘quick and short,’ reservoirs are truly a ‘slow business,’ testing the patience and commitment of finance,” Zhang Weigang admitted.

In 2016, the Yulin branch resolutely took over. Facing doubts about “low returns and high risks,” the branch team visited dozens of government departments and conducted in-depth research in the reservoir area. The project was once shelved due to multiple reasons, but the branch did not give up. Instead, it provided 100 million yuan in working capital support to downstream enterprises, alleviating the overall pressure on the group and planting the seeds for final cooperation.

The key to breaking the deadlock lay in a moment of “inspiration” for financial innovation. In 2024, the Yulin branch successfully promoted the implementation of the “revenue right collateral + group guarantee” scheme—using the future stable revenue rights from water supply and electricity generation of the reservoir as the core collateral, supplemented by a strong guarantee from the Yulin Water Group. This model cleverly balances the long-term nature of livelihood projects with the safety of bank funds. A relevant person in charge of the Yulin Water Group remarked, “The term matched our operational characteristics, truly quenching the thirst for liquidity.”

The 1.35 billion yuan green loan funds were injected like timely rain, pressing the “accelerator” for the project. Efficiency became the key to impressing clients. “From in-depth negotiations to final implementation, it took just over a month, and both efficiency and amounts exceeded expectations,” praised the head of the Yulin Water Group. This loan firmly controlled the enterprise’s financing costs within the target range set by national relevant departments, saving over ten million yuan in interest annually, with the released funds prioritized for environmental governance and facility upgrades in the reservoir area, creating a virtuous cycle of financial vitality nurturing ecology.

The key to green: unlocking climate value and ecological barriers

Beneath the azure waves of the Wanggedu Reservoir flows not only water for daily life and production but also solid actions against climate change. “What we value goes far beyond water security,” Zhang Weigang stated. “Its enormous climate value in locking sand, stabilizing soil, restoring ecology, and enhancing regional carbon sink capacity is a strategic fulcrum for Industrial Bank to practice the ESG concept.”

The reservoir itself is a “solid-state carbon bank.” From the inception of the project design, sediment accumulation was taken into account, with an average annual sediment interception of 3.18 million tons, directly reducing the silt entering the Yellow River and alleviating sedimentation and flood risks in downstream rivers. The vegetation around the reservoir flourishes, forming a green barrier in stark contrast to the once-moving sand dunes.

Sha Miao Village in Leilong Bay Town is a resettlement village for those relocated from the Wanggedu Reservoir. Village leaders have witnessed the transformation of this homeland: “The sand has retreated, the land has turned green, and the water for daily life has become convenient and clear. Industrial Bank has used financial power to let us feel the warmth of ecological improvement.”

Faced with increasingly severe drought challenges, the reservoir’s huge regulation capacity (228 million cubic meters) acts as an “ecological regulator,” annually supplying over 90 million cubic meters of drought relief water to downstream areas during dry seasons, nourishing farmland, wetlands, and ecological protection zones. This powerful climate adaptability makes the reservoir a “ballast” for regional water security, and its value is particularly precious.

This profound understanding of ecological value also runs through the financing practices of Industrial Bank. The ESG concept has been deeply embedded in the financing bloodstream. Although the branch has not made ESG assessment a hard requirement for lending, it has listed it as an important post-lending management indicator. “If a company experiences significant negative ESG events, risk control will be triggered,” Zhang Weigang emphasized. This arrangement subtly guides enterprises to place greater importance on environmental and social responsibilities in their daily operations.

The anchor of development: a reservoir of clear water activates the regional transformation engine

The benefits of the Wanggedu Reservoir have long surpassed a mere stream of clear water. It is becoming a golden fulcrum to leverage high-quality development in Yulin, vividly interpreting the saying “Green waters and lush mountains are as valuable as mountains of gold and silver.”

According to relevant leaders from the Yulin Water Group, the reservoir has been designated as a core drinking water source for over 2 million people across seven counties and districts, completely reversing the history of “drinking with water scarcity from the Yellow River.” The annual average water supply of over 40 million cubic meters, although only 27% of its design capacity, has already become a genuine “lifeline.” With the future completion of the East and West Route Yellow River Diversion Projects, surplus water resources will flow into the Wanggedu Reservoir for unified management, upgrading this “transfer station” to the “central nervous system” of the city’s water resource allocation, releasing even greater potential.

Additionally, serving as the “main source” of industrial and agricultural water in Yulin, the reservoir annually provides 32 million cubic meters of industrial water, injecting “source water” into the energy chemical base and supporting a 30% growth in output value; it supplies 40 million cubic meters of agricultural irrigation water, benefiting 146,000 acres of irrigation districts, allowing the “scent of rice flowers” to reappear across the fertile fields; and it generates 12 million kilowatt-hours of clean electricity, lighting up thousands of homes.

Moreover, the ecological benefits brought by the reservoir are everlasting. After its completion, the regional microclimate improved, biodiversity increased, and the beauty of “Southern Jiangsu in the frontier” began to emerge. Its intelligent irrigation system further reduces silt entering rivers, consolidating the achievements of Yellow River governance.

Hope for the future: the continuous flow of green financial vitality

Standing on the dam of the Wanggedu Reservoir, with vast azure waters and lush greenery, the village leaders from Sha Miao Village in Leilong Bay Town expressed heartfelt gratitude: “Whether in agriculture, animal husbandry, or specialty industries, Industrial Bank has genuinely supported us with financial power. The quality of life for our villagers has improved, and our confidence in becoming prosperous has grown!” This recognition from the reservoir’s residents is the warmest testament to finance empowering livelihoods and ecology.

For the Yulin branch, the Wanggedu project is not only a successful case but also a replicable model of green finance. “Such projects are worth promoting throughout the bank,” Zhang Weigang stated. The Yulin Water Group has also extended an olive branch: cooperation intentions for the Jingbian water supply project have been reached, and they look forward to breakthroughs in innovative areas such as green bonds and ESG-linked loans, seeking greater interest rate discounts and deeper cooperation.

As Yulin has been identified as one of the first batch of carbon peak pilot cities, the green finance layout of the Yulin branch is accelerating and upgrading: the first water right pledge loan of 1 billion yuan (with credit of 1.35 billion yuan) has been issued, the balance of green loans has exceeded 2 billion yuan, and the balance of green financing has approached 5 billion yuan, with the asset scale in transformation fields continuously expanding.

“This is a relay race that never ends,” Zhang Weigang stated firmly. “In the future, we will continue to cultivate the fertile soil of Yulin, care for the people of the old districts, and provide higher-level green financial services, focusing on ecological protection and high-quality development in the Yellow River basin, continuously polishing the ‘green bank’ gold signboard and contributing financial power to write a new chapter of revitalization for the old districts.”

The Yellow River surges, with finance as its escort. The Yulin branch, through ten years of dedication and innovation, has accurately dripped financial vitality to the edge of the Mu Us Desert, allowing the Wanggedu Reservoir, this “pearl in the frontier,” to shine with the brilliance of safeguarding livelihoods, restoring ecology, and combating climate change. The clear water not only lights up thousands of homes but also illuminates the “green gold” future of sustainable development. This path of financial water governance led by the ESG concept is providing a hopeful Chinese solution for the transformation of resource-based cities in the Yellow River basin and across the country.