ADB, 13 Banks Partner for Natural Gas Supply to Small Cities in the People's Republic of China

ADB's $100 million B-loan will expand existing gas distribution networks into satellite cities, bring gas connections to household, commercial, industry customers, and compressed natural gas for public transportation.

HONG KONG, CHINA – The Asian Development Bank (ADB) is partnering with 13 banks to support China Gas Holdings Limited (CGH) expand natural gas coverage into smaller cities in the central and western regions of the People’s Republic of China (PRC).

The $100 million B loan agreement was signed today. The B loan is a part of ADB’s $200 million financing package to the Municipal Natural Gas Infrastructure Development Project (Phase 2).

“Natural gas is a climate smart option but upfront capital investment is significant to build the distribution network in the cities. Partnering with CGH and distinguished commercial banks, we are pleased to support further access for a clean, reliable, long-term energy source to people in smaller cities which are not yet connected and where demand is unmet,” said Jo Yamagata, Deputy Director General of ADB’s Private Sector Operations Department.

Under this project, CGH will expand existing gas distribution networks into satellite cities on the outskirts of cities where CGH currently operates and build pipeline networks to bring gas connections to household, commercial, industry customers and compressed natural gas for public transportation.

Air pollution, acid rain and greenhouse gas emissions threaten people and the environment, not only in PRC but across Asia. While there are myriad factors, cars fuelled by gasoline and industrial boilers and furnaces which consume almost half of the country’s coal production are the major sources of urban air pollution in the PRC. The government is actively promoting public-private partnerships for the natural gas supply chain but access to finance is still a key bottleneck in small and medium-sized cities.

The fund is provided by Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia, Aozora Asia Pacific Finance Limited, The Bank of East Asia Limited, The Bank of Tokyo-Mitsubishi UFJ Ltd., State Bank of India, Sumitomo Mitsui Banking Corporation, Kookmin Bank Hong Kong Limited, Fubon Bank Hong Kong Limited, Woori Global Markets Asia Limited, Chang Hwa Commercial Bank Ltd., Industrial and Commercial Bank of China (Asia) Limited, Taichung Commercial Bank Co., Ltd., and ADB as the lender of record.