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MANILA, PHILIPPINES (15 March 2005) - ADB is promoting sustainable development and protection of an area of the northeast People's Republic of China (PRC) of globally significant biodiversity, through a loan approved for US$15 million.

The project, with proposed cofinanced by the Global Environment Facility (GEF), will protect the natural resources of the Sanjiang Plain wetlands and their watersheds from continued threats, and promote their sustainable use through integrated conservation and development.

It is ADB's first loan operation tackling restoration of a wetlands area.

The project's activities include watershed management, wetland nature reserve management, development of alternative livelihoods, and education and capacity building.

The project area covers 18 counties in the Sanjiang Plain, which comprises 108,900 square kilometers in the northeast of Heilongjiang Province, or an area bigger than the Republic of Korea. The plain is one of the most important grain production areas in the PRC and supports a rich biological diversity, which includes 23 species listed as globally threatened, including waterfowl such as cranes, storks, and swan geese.

However, in the last five decades, the wetlands and forests have shrunk to one fifth of their original size as increasing population and grain production have caused farmland encroachment and overexploitation of the area's water resources.

As the altered water cycle in the wetlands reduced their habitat size and self-cleaning capacity, plant and animal biodiversity of global significance has declined. The northeast tiger, red deer, bear, and other large wildlife all have been killed off, and formerly abundant ducks, geese, cranes, and other waterfowl have nearly disappeared.

"For Sanjiang's wetland-dependent wildlife species to survive, the continuing trend of reduction and degradation of the wetlands must be reversed," says KyeongAe Choe, an ADB Senior Natural Resources Management Specialist.

"The project will develop a model for dealing with the root causes of degradation and adopt a holistic approach for scaling up to cover a wider area."

The project consists of closely interlinked measures to remove the threats. Among them, it will increase forest cover in upper watershed areas and improve water resources planning and management. It will restore 3,433 hectares of wetlands and repopulate wetland natural reserves with globally threatened wildlife.

To discourage inappropriate use of resources, the project will help diversify income sources for poor farm households through actions such as inter-cropping, non-timber forest production and eco-tourism.

The 18 counties under the project are grouped into five watersheds. Six nature reserves, of total area of 150,000 hectares, with the greatest concentration of biodiversity in the five watersheds will be the focus of the protection/restoration actions, which will provide models for replication elsewhere.

As farmland reverts to wetlands, village development plans, to be drawn up in consultation with the affected people, will ensure that villages affected will have alternative opportunities for income that are sustainable. It is estimated that about 46,000 forestry workers also will have job opportunities during the project's implementation period.

The project will also strengthen the capacity of local agencies in charge of watershed and wetland management, and of the nature reserves. Revenues from forest yields will be used to help cover the operation and maintenance costs of the reserves.

ADB's loan, from its ordinary capital resources, accounts for 27% of the project's total cost of $55.55 million. The loan has a 25-year term, including a grace period of five years. Interest is determined in accordance with ADB's LIBOR-based lending facility.

ADB will administer a proposed GEF grant of $12.14 million, while the provincial government will contribute $24.37 million and the county governments and beneficiaries $4.04 million.

The Heilongjiang provincial government is the executing agency for the project, which is due for completion at end-2010.

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