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ADB Approves $178 Million Loan to the People's Republic of China for Industrial Energy Efficiency and Environment Improvement

The Asian Development Bank approved today a $178 million loan to the People's Republic of China to improve energy efficiency in the industry sector by reducing energy consumption. The project will also help clean up the environment at selected facilities.

The loan has a term of 20 years, including a grace period of five years, with an interest rate of 6.9 per cent per annum, and a commitment charge of 0.75 per cent per annum. The total cost of the project is $417 million.

Proceeds of the loan will be relent to enterprises belonging to the most energy-intensive industrial subsectors -- chemical, cement and metallurgical industries. The subprojects will be located at the Jinxi General Chemical Factory in Liaoning Province, Tianjin Soda Plant in Tianjin Municipality, Huaxin Cement Company Limited in Hubei Province; Guanghua Cement Factory in Hubei Province; and Guiyang Steel Mills in Guizhou Province.

The loan is intended to facilitate compliance with prevailing national environmental standards.

The subprojects are dispersed from the northeast to the southwest of the country, including three in poor inland provinces. They have been selected in part on the basis that they may be replicated elsewhere in the country.

The project will improve the Government's energy efficiency programs by strengthening energy conservation management, while continuing market-based reforms in energy pricing. Enterprises will be encouraged to implement corporate governance reforms to enhance performance, efficiency and environmental protection.

The State Economic and Trade Commission will coordinate implementation of policy and institutional measures. Each subproject enterprise will be the Executing Agency of its respective components.

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