BEIJING — The Asian Development Bank (ADB) and Shouguang Luli Wood Inc. (Luli Wood) have signed a $50 million green loan (about CNY353.63 million) to support the construction of an oriented strand board (OSB) factory, associated facilities, and a captive biomass power plant, as well as to finance working capital needs in Jiangxi Province, the People’s Republic of China (PRC).
“Climate stability and healthy natural ecosystems are fundamental global public goods, and this project is a tangible example of how the private sector can be catalyzed to actively safeguard them,” said ADB Country Director for PRC Asif Cheema. “By championing a circular bioeconomy, we are not only reducing emissions and preserving forests but also setting a new benchmark for the forestry sector—demonstrating that commercial viability and environmental stewardship are mutually reinforcing.”
The supply of wood and raw materials in the PRC faces significant challenges, with only 1% of forests certified as sustainably managed. This is compounded by the heavy reliance on imported wood, which accounts for over half of the PRC’s demand. The wood panel market is dominated by plywood, which typically depends on large timbers, encouraging the logging of old and natural forests and the inefficient use of trees.
Luli Wood’s OSB production addresses these challenges. OSB is an engineered wood panel that does not use old-growth timber. It uses wood waste—such as branches and twigs—and small trees sourced from smallholder farmers, with about 10% of the inputs being fast-growing and sustainable bamboo. The waste generated from the OSB production is used as fuel by a biomass power plant, which generates the electricity and steam required to operate the factory.
ADB’s financing is verified as a green loan by ERM, a second-party opinion provider, in accordance with the Green Loan Principles.
The project is expected to reduce greenhouse gas emissions by around 200,000 tons of carbon dioxide annually, create 1,500 jobs, and provide additional income for thousands of smallholder wood suppliers. The project also incorporates a gender action plan that will increase women’s inclusion across Luli Wood’s value chain, operations, and workplace.
“Partnering with ADB is a powerful endorsement of our vision,” said Luli Group Vice Chairman Xue Mingliang. “We have built a fully integrated, green supply chain—from sustainable forestry to finished homes—and are committed to setting a new standard for the industry. This collaboration is a pivotal step in our journey to becoming an international company in sustainable wood processing.”
Established in 2001, Luli Wood is a subsidiary of the diversified Luli Group and one of the largest OSB producers in the PRC. The company holds chain-of-custody certifications from both the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC). These certifications ensure traceability and responsible sourcing from forest to finished product, validating that raw materials originate from certified forests or recycled materials. Luli Group is ranked among the top 500 private companies in the PRC.
ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.
