Tongwei County, Gansu Province

From Rural Isolation to Market Integration: A Pilot Partnership

From Rural Isolation to Market Integration (Tongwei II)

Map of Tongwei County, Gansu Province

“In doing the work and projects involved in promoting local economic development, one has to put consideration of environmental protection at the top of the priorities; you can’t take environmental resources and cash them in return for local economic development. From today onward, we will take the EC MF+RE project as a turning point in our development, and widely publicize knowledge about environmental protection, make a big effort to extend the use of renewable energy, firmly establish the environment as a priority, exert our best efforts to develop a circular economy, and push for the joint develop of both the economy and the environment, harmonious development.”

Tongwei County Director Mr. Wang (from Tongwei I Impact Report)

Location: Tongwei County, Gansu Province, China
Start Date: Early 2010        Duration: 42 months
Partner(s): Tongwei County Government, European Commission
Total Cost of Action: EUR 938,434.83                                                                                                    European Commission Funding 75%

             

Background

Through the Tongwei I project, PlaNet Finance has gained a deep understanding of the local development and environmental challenges that weigh heavily on the Tongwei community. As a result, PlaNet Finance has created the expansion project Tongwei II: From Rural Isolation to Market Integration or “Tongwei II” for short, to utilize and build upon the excellent foundation of our past efforts and offer continued support to assist Tongwei’s people and government develop in a sustainable manner. Tongwei II will focus on increasing financial inclusion, further incorporating renewable energy technology into daily life, developing Tongwei’s nascent green industries, and finding ways to add value to raw commodities within the greater Tongwei farming communities.

In addition to the work in Tongwei County, Tongwei II also includes activities in Cheng County. Cheng County, or Chengxian, lies 400 kilometers south of Tongwei in the Longnan area of Gansu province. A population of 263,000, of which 219,000 are farmers, reside within 17 townships and 96 villages. Approximately 70% of the farmers currently live in relative to extreme poverty (earning between RMB 645 – 825 (EUR 60 – 80) per annum.) In addition to this poverty, Cheng County residents also face the devastating aftermath of the May 12, 2008 earthquake which includes significantly damaged infrastructure and homes.

We believe Cheng County area’s weather and water conditions are suitable for biogas development, and given the favorable conditions, PF China would like to ultimately replicate the successful model of Tongwei I. With loans for biogas technology implementation, residents of Cheng County can take advantage of renewable energy technology while simultaneously building the local economy and improving the currently very-poor living conditions.

Objectives

  • To help the local county government of Tongwei County improve living conditions of greater numbers of the rural population by better utilizing the county’s own resources and talents
  • To improve Tongwei County’s investment environment and build its own green development path to increased GDP
  • To use the microcredit training platform in Cheng County and enable the ultra poor to utilize their own talents and improve their living conditions.
  • To promote greater financial inclusivity by opening up new microfinance loan centers in five townships to provide small general business and renewable energy loans to the township residents as well as to the outlying village population.
  • To help a local county government advocate for its right to development in an eco-smart and sustainable way
  • To provide China and the world with an example of green and sustainable, rural development

Project Abstract

The project builds on the foundation of the current project by creating new opportunities to grow the cash economy, improving living conditions for greater populations, and protecting the local environment through renewable energy and development of eco-smart businesses. By introducing renewable energy opportunities and microfinance services to a greater population and therefore fostering new small businesses, Tongwei II will increase access to fundamental needs such as access to finance, to energy, and to decent employment.

The project promotes renewable energy technologies as a way to stimulate and accelerate the creation of sustainable and eco-friendly businesses in Tongwei County. The main activitiy will be to establish, in partnership with the county government, a Rural Business & Innovation Center (RBIC) and incubator for commercialization of agricultural commodities (see below). We have developed product ideas such as health-related products using local Chinese medicinal herbs, organic fertilizer, and a vegetable waste-based substitute for dirty coal.

We have all along encouraged the local authority to advocate for its development path to be along sustainable lines, reinforced by access to case studies on sustainable development from Northern Europe, and showing Tongwei County’s superior administrative levels that investors can be attracted by assets in the local environment including clean earth, clean air and clean water of such an area. We believe of particular interest in this context will be the models followed by Finland and Sweden in growing GDP on a green path, and also Estonia’s innovations under its 2004-6 Rural Development Plan. Estonia shares several characteristics with Tongwei: many small farms, dependency on livestock, and using local economic development to keep people on the land and to increase the efficiency of local agriculture.

The Rural Business Innovation Center (RBIC)

The RBIC is comprised of several sections:

  1. An open-door knowledge center, printed materials/computer-based/instructional videos library open to all members. The Knowledge Center will double as an information center for enquiries concerning the local investment environment, regulations, etc.
  2.  A kitchen/lab for:
    a.    experimenting with crops grown using more organic growing practices
    b.    experimenting with cash crop introductions adapted to local growing conditions
    c.    trialing design of finished food product development and branding to build a small business for a local entrepreneur/create jobs for local people at an established company
  3. A training center for would-be entrepreneurs and green collar jobs
  4. A showcase for renewable energy technologies
  5. A microfinance service counter to provide financing for small-scale RE technology investments, and more.
  6. An open area for technical training (agricultural, veterinary and green jobs) which will also be a venue for cross-disciplinary brainstorming

We're trying to work with architects and LEED certified professionals in volunteering their time the help us design and build a physical structure which is energy-conserving and has carbon-footprint reducing technologies 

Main Activities

  • Creation of Rural Business Innovation Center
  • Extension of Microfinance to 5 townships and 27 villages
  • Workshop on Rural Local Economic Development Strategies (LED)

Target Group

  • Approximately 3,000 new microfinance clients eligible for a multiplicity of trainings from five outlying townships (estimated average population per township 2,500 people) and villages (estimated average population 1,200 people in each village) in addition to the existing base of existing microfinance clients that is now 5,000- strong;
  • 1,200 households of microfinance clients invest in biogas systems
  • The absolutely poor of 10 poverty villages in Cheng County
  • Five townships and, later, 27 villages get access to microfinance services
  • The implementing bureaus and offices of Tongwei government,
  • The Tongwei county government, which sees first-hand new development models in Europe that are based on sustainable development principles. In the delegation will also be a number of officials of a superior level to Tongwei County, to ensure their support for Tongwei’s future initiatives

Final BeneficiariesCheng County Resident

430,000-strong farming population of Tongwei County and 10,000 villagers in Cheng County

Funding Request

In order to reach as many individuals as possible, we need to increase the loan funds circulating in the area.  PlaNet Finance is seeking RMB 2 million or (Euro 200,000) of capital in the form of donations or interest-free loans to make this possible. If you or your organization is interested in supporting this groundbreaking project in rural China, please let us know!

 

Cheng County Resident working the field

For more information or interest in getting involved, please contact Gabrielle Harris, Executive Director of PlaNet Finance China, on gharris[at]mfchina.cn