MANILA, PHILIPPINES (13 November 2023) — The Asian Development Bank (ADB) has approved a $150 million equivalent loan to support environmentally sustainable rural development in Guangxi Zhuang Autonomous Region (Guangxi) in the People’s Republic of China (PRC).
“The Guangxi Environmentally Sustainable Rural Development Demonstration Project will apply environmental, social, and governance (ESG) principles by supporting green and modernized agribusiness for rural development in the area,” says ADB Principal Infrastructure Finance Specialist Kang Hang Leung. “It will promote the adoption of digital technologies to drive environmentally sustainable rural development.”
Guangxi is one of the PRC’s least developed regions; the agriculture sector is the main income source for its rural population. However, its agriculture and rural development face environmental and climate change challenges as it is particularly vulnerable to climate change and can be a key resource of greenhouse gas emissions. The increased frequency of extreme weather events in Guangxi such as droughts, floods, and heatwaves also negatively impact land cultivation and agriculture production.
The project aims to enhance climate-resilient rural development by establishing a rural ESG financing facility through an ADB financial intermediation loan (FIL). The FIL will leverage financing from the participating financial intermediary to expand investments in sustainable agribusiness, which will improve financing access for small and medium enterprises in sustainable and value-added agriculture production, processing, and value chain development. Through the FIL, the project will reach many small agribusiness market players which have financing and capacity constraints.
The project will also strengthen institutional capacity for environmentally sustainable rural development, including promoting new low-carbon and sustainable agriculture practice technologies and applications and building a digital management information system platform at the Guangxi Department of Agriculture and Rural Affairs.
The total project cost is $420 million, with $270 million counterpart financing from beneficiaries, government, and other sources. The project will benefit more than 150,000 rural residents in Guangxi. This is the first local currency loan in the PRC for a sovereign project, aimed at managing foreign exchange risks.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.