MANILA, PHILIPPINES - Xinjiang, a poor region in northwest People's Republic of China (PRC), will receive a $100 million loan for urban living improvements designed to spur sustainable growth and improve the environment.

The Asian Development Bank's (ADB) Board of Directors approved the loan from its ordinary capital resources (OCR) for the Xinjiang Urban Transport and Environmental Improvement Project. Counterpart funds of $87.2 million are being provided by the cities of Altay, Changji, Hami, Kuytun and Turpan, who are the target beneficiaries.

Xinjiang, which shares borders with eight countries and provides a gateway between PRC and Central Asia, has 46 minority groups, which make up over 60% of its population. It also has some of PRC's highest poverty rates and has lagged coastal regions in benefiting from the country's economic boom. Poor urban infrastructure has deterred investment, degraded the environment and limited growth opportunities, especially in the promising tourism sector.

"The project will generate employment opportunities, and improve urban living standards and the environment for residents in the project cities, particularly for ethnic minorities and the poor," said Raushan Mamatkulov, Urban Development Specialist in ADB's East Asia Department.

The loan will be used to build or upgrade over 100 kilometers of roads; to install traffic signals and other road safety systems and to construct public toilets and other sanitation facilities. The project complements other ADB-financed initiatives to improve urban infrastructure in Xinjiang, and supports the PRC's own drive to spur economic development and environmental improvements in the west of the country. Since 1992, ADB has provided more than 39 loans worth nearly $4.9 billion to PRC for urban infrastructure and environment projects.

The loan will have a 25-year term, including a five-year grace period, with pricing set in accordance with ADB's LIBOR-based lending facility. The funds make up around 53% of the total project cost of $187.2 million. The executing agency is the Xinjiang Uygur Autonomous Region government and the project is expected to be completed by June 2014.

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