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Battling Acid Rain In PRC's Anhui Province

MANILA, PHILIPPINES (20 December 2001) - Air quality in four cities in Anhui Province, the People's Republic of China (PRC), will improve as a result of a US$147 million loan approved today by the Asian Development Bank (ADB) for the Acid Rain Control and Environmental Improvement Project.

Acid rain is emerging as a major concern in Asia. Soil acidification damages agriculture and forestry, increased acidity upsets the ecology of rivers and lakes, and acid deposits damage cultural and historical structures.

This first ADB-supported acid rain control project will reduce the pollution that causes acid rain. Air quality in this poor inland province of central PRC has deteriorated to levels harmful to human health. Acid rain has been especially damaging in the ecologically rich Yangtze River Valley, more seriously than in other parts of PRC.

The project has three main goals - to reduce acid rain, improve the environment in ecologically valuable areas, and strengthen institutions.

It will achieve this by:

• Lowering sulfur dioxide emissions, a major cause of acid rain, by promoting cleaner production among industrial enterprises in the secondary cities of Guichi, Huangshan, Tongling and Wuhu. These methods include cutting down waste, using technology to remove harmful gases, and improving energy efficiency. Such techniques will be used at six companies engaged in the production or refining of metals and chemicals.
• Improving the environment in two ecologically valuable areas damaged by acid rain in the Huangshan and Jiuhua mountains. This includes improvements in power, water supply and sewage treatment facilities and forest fire protection methods.
• Strengthening the institutional capability of Anhui Provincial Government and its municipal counterparts to formulate, implement and monitor policies to reduce emissions of sulfur dioxide and other gases causing acid rain; and enhancing management in the subproject enterprises.

"This project will improve health and drinking water for residents and provide better working conditions for state enterprise workers," says Piya Abeygunawardena, ADB's Senior Economist for Environment. He notes that other benefits include enhanced agriculture and forestry productivity, and more direct and indirect employment. In addition, investment in cleaner production and technology transfer will promote economic growth and reduce poverty.

Anhui Province, which has a strong cultural heritage, has pioneered various initiatives to clean up damage to its fragile eco-systems caused by heavy industrial pollution. The project is also in line with the PRC Government's comprehensive plan to overcome environmental degradation and urban pollution caused by acid rain.

The total cost of the project is US$325 million. Apart from the ADB loan, financing will come from the provincial and municipal governments, domestic banks and the industrial enterprises. The ADB loan will come from ADB's ordinary capital resources under its LIBOR-based lending facility. Repayment will be over 20 years, including a 4-year grace period.

Anhui Provincial Government will be the executing agency for the project, which is due for completion at the end of 2005.

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