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Regions and Countries Country Partnership Strategy Document
IV. Country Performance and Lending LevelsA. Lending Level Proposed29. ADB lending to the PRC in 2001 is estimated at $1.185 billion based on the current processing status of eight projects. During 2002-2004, the PRC will continue to need massive investments to support its development priorities of the TFYP, including the development of the western region. Based on the strong project pipeline, the proposed lending is estimated from $1.3 billion to $1.4 billion annually during 2002-2004 (Appendix 4). This lending level is commensurate with the PRC's sound macroeconomic fundamentals and high absorptive capacity and takes into account its satisfactory record of project implementation. 30. In conjunction with the proposed lending program, ADB will continue to actively pursue cofinancing from official and commercial sources (including export credit agencies). ADB will maintain its dialogue with the Government to identify the best financing solutions, including the use of credit enhancement products. Cofinancing from domestic banks will remain substantial. Efforts will be made to mobilize grant financing from the GEF and other sources. B. Loan Program31. Transport projects, which have large average loan sizes, will account for half of the proposed lending program. The share of social infrastructure projects to total lending will sharply increase from zero in 2001 to 25 percent in 2004. Energy, natural resource management, and agriculture projects account for the balance of the proposed lending. About 70 percent of the lending program will finance projects in the poor central and western regions. This regional focus on the poor inland provinces will provide opportunities to increase productivity to help reduce poverty. Poverty classification of the proposed projects will be refined as more information becomes available during project preparation. C. Technical Assistance and Economic and Sector Work Program32. An annual TA program of about $12 million-$13 million for funding by ADB through its Technical Assistance Special Fund (TASF) and Japan Special Fund (JSF) is proposed during 2002-2004 (Appendix 4). Outside of this core TA program, additional TA will be proposed for funding by other sources. Priority will still be given to project preparatory TAs. The advisory TA program has been prioritized based on how the proposed TA will address the strategic themes of poverty reduction, environment, governance, and the private sector. The remaining advisory TA funds will be used to conduct important economic and sector work (Appendix 5). D. Summary of Changes33. The proposed program has a strong regional focus on the central and western provinces. All transport projects are located in the poor interior provinces. The number of social infrastructure projects will increase significantly. Energy projects will focus on cleaner and renewable sources of energy and power system efficiency improvements, with reduced lending for large thermal power generating plants. Agriculture and natural resource management projects will adopt a more integrated approach for addressing poverty issues. The PRC-GEF partnership will enable ADB to help ameliorate the impact of land degradation on poverty. Unlike previous years, the program does not include lending in the financial, industrial, ports, or telecommunication sectors. The proposed TA program indicates a substantial drop from the $20 million approved in 1999 to around $13 million during the period. The use of strategic themes to guide the TA program is an initiative that will sharpen the focus of ADB's economic and sector work in the PRC and maximize the effectiveness of ADB's policy contributions to the PRC's reform program. Project selection briefs and TA concept papers for ADB’s activities are given in Appendix 6.
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