ADB, China Everbright to Help PRC Create Energy from Farm, Municipal Waste

News Release | 26 November 2012

BEIJING, PEOPLE'S REPUBLIC OF CHINA - The Asian Development Bank (ADB) and China Everbright International Ltd. have signed a loan agreement for agricultural and municipal waste-to-energy (WTE) projects in the People's Republic of China (PRC) to reduce the environmental impact of agricultural and municipal waste disposal.

"The WTE option is very attractive for the PRC since the government has set the development of a recycling economy as a national goal," said Shuji Hashizume, Investment Specialist in ADB's Private Sector Operations Department, during the signing ceremony.

The PRC aims to install agricultural waste-to-energy capacity of up to eight gigawatts by 2015.

The project aims to treat about 7,300 tons of waste a day, generating around 1,240 gigawatt-hours of electricity a year by 2016. Greenhouse gas emissions are also expected to be slashed by about 638,000 tons per annum by 2018.

The PRC is the world's biggest producer of agricultural waste, with around 700 million tons of crop straw produced in 2010 alone. It also generates about 200 million tons of municipal solid waste every year. Untreated disposal is increasing contamination of soil and groundwater nationwide.

Incineration is recognized as a particularly effective method for waste treatment since it reduces waste volume by 90% and eliminates methane emissions. WTE technologies recover the waste energy from the incineration process and use it to steadily produce electricity and heat. By replacing fossil fuel combustion and avoiding methane, WTE helps avoid greenhouse gas emissions and mitigates climate change.

The WTE projects will also provide additional income for farmers who sell agricultural waste and for small and medium-sized enterprises responsible for waste collection and transportation.

The four loans of up to $200 million will be provided to China Everbright Biomass Energy Investment Ltd. and China Everbright Environmental Energy Ltd., units of China Everbright International Ltd., listed on the Hong Kong Stock Exchange.

China Everbright International Ltd. is currently operating municipal WTE plants supported by ADB, but limited access to finance in the agricultural WTE sector has prevented it from branching out into the agriculture sector. ADB's assistance will allow it to expand into plants which utilize a wide variety of agricultural waste, including straw, stalks, and tree bark. It will also target more municipal WTE plants utilizing all forms of combustible household and non-hazardous commercial waste.