A new form of innovative funding is helping to unlock the financial value of environmental resources in Quzhou city in East China's Zhejiang province for the benefit of its people – with hard loans now being issued to undertake green projects in the region.

The breakthrough is the result of the opening in September last year in Changshan county in Quzhou of a so-called Liangshan Bank – an intermediary financing platform which allows commercial banks to issue special ecological finance loans by mortgaging natural resources.

The name Liangshan Bank – meaning, the bank of two mountains – comes from China's environmental Two Mountains concept, under which "lucid waters and lush mountains are invaluable assets". It's a green financing program that is spreading across China and has now come to Quzhou.

Those in need of financing then mortgage green assets to the platform, after which a local commercial bank provides the loan.

In 2020 Quzhou, as a national green finance reform and innovation pilot zone, became one of two pilot cities for the province's "two mountains bank" reform.

Liu Yinxiang, a villager from Xishanxia village in Qujiang district, has a disused farmhouse covering 140 square meters that was difficult to rent out because it had not been maintained well.

In April, Liu transferred the rights to use the house for 10 years to the local two mountains bank and obtained a good fixed income.

This was reportedly the first ecological resource deposit note issued by the bank in Qujiang district and was also the first ecological resource deposit note in Zhejiang.

Over the past decade, Quzhou has trying to adhere to the Two Mountains theory and take full advantage of its rich natural resources.

In 2017, Quzhou was designated as a "Lucid Water and Lush Mountains are Valuable Assets" Practice and Innovation Base, a demonstration zone for the Two Mountains theory and a core area of Zhejiang's Big Garden project.