China, People's Republic of: Shandong Groundwater Allocation and Protection

Sovereign Project | 47047-001

Summary

The proposed loan for the Shandong Groundwater Allocation and Protection Project will explore and implement restoration approaches for over-exploited groundwater resources in Weifang and Zibo cities in Shandong province, People's Republic of China (PRC). The proposed loan will optimize surface and groundwater allocation and usage, increase retention of storm water, and rehabilitate the management of wetlands to improve groundwater recharge. PRC draws groundwater heavily, a large proportion of which is used to irrigate more than 40% of the country's farmlands. Especially in the Northern China plain (NCP), rapid economic development has caused severe over-exploitation of its groundwater resources, and groundwater levels have dropped to critical levels in many areas.

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Project Name Shandong Groundwater Allocation and Protection
Project Number 47047-001
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8423-PRC: Shandong Groundwater Allocation and Protection
Technical Assistance Special Fund US$ 600,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Agriculture, natural resources and rural development - Water-based natural resources management
Gender Equity and Mainstreaming Some gender elements
Description The proposed loan for the Shandong Groundwater Allocation and Protection Project will explore and implement restoration approaches for over-exploited groundwater resources in Weifang and Zibo cities in Shandong province, People's Republic of China (PRC). The proposed loan will optimize surface and groundwater allocation and usage, increase retention of storm water, and rehabilitate the management of wetlands to improve groundwater recharge. PRC draws groundwater heavily, a large proportion of which is used to irrigate more than 40% of the country's farmlands. Especially in the Northern China plain (NCP), rapid economic development has caused severe over-exploitation of its groundwater resources, and groundwater levels have dropped to critical levels in many areas.
Project Rationale and Linkage to Country/Regional Strategy

The Weifang-Zibo aquifer, which is in the NCP, is the largest over-exploited area in the Shandong province, and the second largest in the PRC. Water per capita in the Weifang-Zibo area is about one-sixth the average in PRC. The two cities are developing rapidly and domestic and industrial water demands are increasing. Known as the vegetable basket of Beijing, the agricultural production in the Weifang-Zibo area is high with a large concentration of greenhouses. The agricultural sector is the largest water user, which uses an estimated &.% of the total current groundwater abstractions.

Seasonal rainfall fluctuates widely, with an average 70% of the rainfall occurring from June to September. Frequent flooding occurs during the summer months, often followed by droughts during the remaining periods of the years. Recharge of groundwater resources over the year is insufficient to recover from the excessive pumping during the dry periods. Storm waters flow to the sea unutilized, and often cause serious damage to land and properties in the area. The pattern of irregular rainfall is expected to worsen as a result of climate change.

The consequences of the current unsustainable groundwater utilization are serious: (i) future domestic water supplies and agricultural production are at risk; and (ii) the area is already suffering from significant financial and economic damages caused by land subsidence, increasing pumping costs, and groundwater quality deterioration due to seawater intrusion and environmental pollution. The process of land subsidence is irreversible, and urgent action is needed to avoid worsening. Some areas have already experienced subsidence of up to 2.25 meter, and seawater intrusion ( up-coning') in the north has reached 35 kilometer from the coast.

Shandong province is selected by the central government as a demonstration province for modernized water administration. The Shandong provincial government (SPG) has already taken multiple initiatives to address water scarcity in the NCP, including promoting water efficiency and re-use, and introducing regulations on groundwater pumping. The results have not yet been successful in stopping further decline of groundwater levels in the Weifang-Zibo area. Also, the government is constructing the south-north water transfer scheme, which is expected to provide additional water for Shandong province in 2014. Studies indicate that, because the diverted water will be mainly for municipal and industrial use, this scheme will not be sufficient to mitigate the current over-exploitations of the groundwater resources in the NCP.

Aspects that require urgent action include (i) increased efficiency in the use of groundwater, in conjunction with the retention of surface and storm water; (ii) introduction of groundwater pricing; (iii) improved monitoring of groundwater quality and use; (iv) technical solutions to recharge groundwater resources; and (v) empowerment of local communities to manage and protect their groundwater resources. Also, there is an urgent need to raise the awareness and capacity of the central and local governments in managing groundwater information, assessing the scale and priorities of the problems, and enforcing legislations.

The project is consistent with PRC's Twelfth Five-Year Plan (2011 2015), which pursues the long-term goal of building a harmonious and moderately prosperous society through regionally balanced and environmentally sustainable growth. It is also in line with ADB's country partnership strategy, 2011 2015 for the PRC in supporting the government's overarching strategic goal by focusing on inclusive and environmentally sustainable growth, and ADB's Water Operational Plan 2011 2020. The proposed project is included in ADB's lending pipeline as 2015 standby for the PRC. Project loan is proposed as financing modality of the project.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

The loan fact-finding mission was conducted from 5 to 13 February 2015. The MRM is scheduled in May 2015 and the loan negotiations, in July 2015.

A final workshop on innovative groundwater management practices in PRC is being organized in May 2015 in Jinan, Shandong province, in close coordination with the team of the Ministry of Water Resources, the EA for the technical assistance project on PRC Country Water Assessment. Experts from other provinces, including Beijing, will be invited to the forum to present typical experiences.

Business Opportunities
Consulting Services About 18 person-months of staff time will be required to prepare the project. A project preparatory technical assistance (PPTA) of $850,000 equivalent will be required to help prepare the project in compliance with ADB's and the government's requirements (Appendix 4). An amount of $600,000 equivalent will be provided on a grant basis from ADB's Technical Assistance Special Fund (TASF-other sources); and $250,000 equivalent is requested from the Multi-Donor Trust Fund under the Water Financing Partnership Facility (WFPF).
Responsible ADB Officer Frank Radstake
Responsible ADB Department East Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, EARD
Executing Agencies
Shandong Provincial GovernmentPeople's Republic of China
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 09 Aug 2013
Last Review Mission -
Last PDS Update 18 Mar 2015

TA 8423-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
09 Aug 2013 03 Sep 2013 03 Sep 2013 31 Mar 2015 30 Sep 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
600,000.00 0.00 0.00 0.00 0.00 0.00 600,000.00 09 Aug 2013 504,362.16

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