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ADB Approves $100 Million Loan to PRC for Railway Project in Sichuan Province

Northeast Sichuan Province, which is one of the poorest regions in the People's Republic of China, will be opened up to rapid economic progress with the approval today by the Asian Development Bank of a $100 million loan and a $400,000 technical assistance grant for the Daxian-Wanxian Railway Project.

When constructed, a 156-km single-track railway will link Daxian to Wanxian, a port city on the Yangtze River. The railway will provide a more efficient mode of transport and will open a new rail-waterway transportation route from Sichuan Province to the Yangtze River delta. It will bring benefits to the province's agri-industry and enable development of abundant natural resources which could not be tapped due to limited transportation access. The intermodal transportation will open up market access for exports.

The Project area is situated in one of the 18 poorest regions in the PRC where the average income is less than one-third of the national average. About 20 percent of the 16 million residents live below the official poverty line with net incomes of about $50 per year. By providing transport infrastructure, the Project will help create conditions necessary to accelerate economic development which will help in reducing poverty.

The loan will be provided from the ordinary capital resources of the Bank. The interest rate will be determined in accordance with the Bank's pool-based variable lending rate system for US dollars. The loan will be repaid in 24 years including a grace period of four years.

The technical assistance grant will assist in the institutional development of local railways in Sichuan Province to operate successfully in a commercial environment.

The project is expected to be completed in June 2000. The Sichuan Dawan Railway Corporation will be the executing agency for the project and will provide $260 million of the estimated total project cost of $360 million.

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