Days before Beijing cut bank reserve requirements to boost lending to China’s slowing economy, officials in Hebei province met with dozens of banks and steel mills to find financing to revive local industry and tackle chronic environmental problems.

During the meeting with 32 banks and 64 steel mills, which came a month after Premier Li Keqiang voiced support for financing initiatives for the smoggy northern province, 18 banks agreed to lend more than 623 billion yuan ($100 billion) for “technological renovation and industrial transformation” this year, Hebei’s industry bureau said.

As China’s economy struggles and heavily leveraged banks restrict lending to polluting industries, Beijing is urging targeted capital injections not only to improve the environment, but also to stimulate growth in cutting-edge industries like emissions controls and water treatment.

Economic growth in the first quarter fell to its slowest rate in six years, prompting the People’s Bank of China (PBOC) to cut how much banks must keep in reserve by 100 basis points on Sunday, the biggest cut since 2008, in a bid to get banks lending more.

Growth in Hebei slipped to 6.5 percent last year, one of the lowest rates in the country, and Premier Li told the province’s delegation to the annual parliament last month that central government should help out with preferential financing policies.

“Hebei is enjoying favorable financing support due to its proximity to the capital and the urgency of cleaning up air pollution,” said Chen Bo, economist with the Central University of Finance and Economics.

The Hebei government would not comment for this story but has previously said banks had pledged a further 761.3 billion yuan to help develop the private sector in the province.

The PBOC also cut reserve requirements for the Agricultural Development Bank, a policy lender, by an additional 200 bps.

“This is because of a State Council meeting after the spring festival, which called on ADBC to increase support to the bridge loans for major national water projects,” a bank executive said.

WINNERS AND LOSERS

Hebei’s steel mills have to comply with tough state pollution standards by the end of the year, but with cash scarce and demand weak, firms are struggling to comply.

Neither the reserves cut nor the financing package is expected to rescue Hebei’s worst-performing firms, but it could help favored enterprises pay for upgrades and cover higher compliance bills.

Hebei said banks would provide 35 billion yuan to help cover the 100 billion yuan cost of renovation at 32 major steel enterprises in the province, and said the entire financing deal would alleviate risks for “enterprises that have a market and are competitive but are temporarily experiencing difficulties”.

Though many private steel and cement plants could perish, China hopes its war on smog will benefit hundreds of environmental enterprises.

According to the official People’s Daily, a recent action plan to clean polluted water could boost GDP by 5.7 trillion yuan. Firms set to benefit include Sound Environment, Beijing Origin Water Technology and Guangxi Bossco Environmental Protection, whose share price has soared 250 percent since listing in February.

Hebei’s financing plan, together with the country’s wider commitment to reduce emissions, is also likely to boost firms making equipment to treat industrial emissions, including Fujian Longking and Wuhan Kaidi Electric Power. Soil treatment firms like Dongjiang Environmental also stand to benefit from a clean-up campaign.

But even as Beijing makes more credit available, economists remains skeptical that banks will have the latitude to help out private clean tech firms, with struggling state enterprises still likely to be the biggest beneficiaries of new financing.

“There are banks that still favor big state-owned companies, and new financing mechanisms are required,” said Wang Yao, a climate and energy economist from the Central University of Finance and Economics.