NF Energy Saving Corporation Comments on The People's Republic of China's Important New Incentive Policies in Support of the Energy Service Industry
SHENYANG, China, April 12 /PRNewswire-Asia/ -- NF Energy Saving Corporation (OTC Bulletin Board: NFEC; "NF Energy"), a Chinese leader in providing integrated energy conservation solutions, today commented on the recent release of the People's Republic of China's State Council Plan, "Opinion on Accelerating the Implementation of Energy Management Contract to Promote the Development of Energy Service Industry," ("the Opinion"), which outlines the development goal, financial subsidies, preferential tax policies, accounting policies and pilot projects, etc. for the Energy Service Industry in China.
The Opinion consists of two phases outlined below:
Phase I -- Support and cultivate a group of professional energy service companies ("ESCO") with a goal of establishing an active energy service market by 2012.
Phase II -- Establish an improved energy service system and further expand the ESCOs, making Energy Management Contracts ("EMC") one of the major approaches for energy retrofitting by 2015.
The government will provide the following support to ESCOs:
-- Financial Subsidies
-- Financial subsidies will be provided to EMC projects through the
central government investment budget and central finance special
funds for energy saving and emission reduction projects.
-- Preferential Tax Policies
-- Business Tax and Value Added Tax exemption for ESCOs;
-- Three years exemption, followed by three years of a 50% reduction in
Corporate Income Tax for ESCOs;
-- Relevant expenses can be deducted before tax by energy consumption
companies; and
-- Related assets are deemed as fully depreciated for tax purpose in
the ownership transfer after contract expiration.
-- Preferential Accounting Policies
-- EMC expenditures incurred by government departments and public
institutions can be charged to energy expenses and associated
expenses; while those incurred by enterprises can be charged to
expenses in their current accounting period.
EMC is an effective energy service mechanism widely used in developed countries. Under the EMC model, ESCOs provide a series of services such as energy auditing, financing, and retrofitting to energy consumption companies to reduce their per unit energy consumption and green house gas emissions, and then generate returns by sharing energy saving benefits during the contract period. Where implemented, these programs greatly reduce energy consumption, company investment and risks, and therefore companies are motivated to pursue energy retrofitting. The EMC model has been highly effective domestically and internationally. Accelerating the implementation of the EMC model to develop the energy service industry in China will be a powerful measure to promote energy savings and emissions reduction and is a pressing demand to develop an energy saving and environmental-friendly society.
As the Deputy Director of China Energy Management Companies Association (EMCA), Mr. Gang Li, President & CEO of NF Energy Saving Corporation, participated and assisted in the preparation of the Opinion. "Benefiting from the government incentive policies, there is now a new catalyst for continued growth for energy service industry companies and ESCOs. EMCA estimates that the energy service industry will achieve an output of RMB80 billion in 2010 and maintain a growth rate of 30%-40%. Ultimately, it is expected to reach RMB400 billion output in the future," commented Mr. Gang Li, "As a member of EMCA, and an experienced player in the field of EMC, NF Energy will continue to expand its exposure in the energy service industry and EMC business by taking advantage of the preferential policies released by the Chinese government. We expect to directly benefit on multiple financial levels from the policies outlined by the Government."
About NF Energy Saving Corporation
Website: http://www.nfenergy.com
NF Energy Saving Corporation (OTCBB: NFEC) is a China-based provider of integrated energy conservation solutions utilizing energy-saving equipment, technical services and energy management re-engineering project operations to provide energy saving services to clients. The current revenues are primarily from its energy saving flow control products. Headquartered in Shenyang city of China, the Company currently has 225 employees and several proprietary energy saving technologies and patents.
Safe Harbor Statement
This press release contains certain statements that may include "forward- looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," "anticipate," "optimistic," "intend," "will" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
American Capital Ventures
Howard Gostfrand
Tel: +1-305-918-7000
SOURCE NF Energy Saving Corporation
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