BEIJING, PEOPLE’S REPUBLIC OF CHINA – The Asian Development Bank (ADB) has signed loans of up to $450 million equivalent to help the People’s Republic of China (PRC) scale up its use of natural gas for transport to curb fast-rising emissions from automobiles and river freight.
“Traffic volumes have been rising fast in the PRC, resulting in air pollution problems not just here but also in other parts of Asia,” said Hisaka Kimura, Head of Private Sector Infrastructure Finance, East Asia Unit, in ADB’s Private Sector Operations Department. “Helping motor vehicles, as well as vessels that ply inland waterways, switch from diesel to natural gas will mitigate air pollution, fine particulate matter [PM2.5] in particular.”
The ADB loans will be extended to China Gas Holdings Ltd. to build and operate up to 600 compressed natural gas (CNG) and 200 liquefied natural gas (LNG) refueling stations along major land transport corridors, and a further 20 LNG filling stations for river vessels by 2018.
CNG is ideal for short-haul travel while LNG is more efficient for heavy duty long-distance highway and inland waterways networks. Further, the PRC has the world’s largest inland waterway transport network, which represents great potential for further greening transportation, using LNG.
ADB’s assistance comprises a $150 million equivalent dual-currency loan in dollars and Chinese yuan, and a complementary $300 million equivalent dollar-yuan loan from participating commercial banks.
The assistance will also support the PRC’s drive to diversify its energy mix. The country has abundant undeveloped natural gas reserves, estimated at about 3.1 trillion cubic meters. Yet, PRC is one of the lowest per capita gas consumption countries globally.
While the PRC’s natural gas supplies are increasing, demand remains unmet. ADB’s support is expected to encourage greater private sector participation in this sector and address bottlenecks in mainstreaming gas use for transportation, particularly in long-distance transport corridors that cross municipal and provincial boundaries.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2013, ADB assistance totaled $21.0 billion, including cofinancing of $6.6 billion.