Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Land-based natural resources management

During the country programming mission for the People's Republic of China (PRC) in December 2009, the government requested the Asian Development Bank (ADB) to finance the Shaanxi Weinan Luyang Integrated Saline and Alkaline Land Management Project, with an indicative lending amount of $100 million. The proposed project is in the 2012 lending pipeline.

Luyanghu area is one of the national poverty areas, with about 32,400 villagers. Most of them were mainly immigrants from Henan and Shandong provinces. More than 90% of the villagers are impoverished. Their 2006 average per capita income was only CNY1,480, which is CNY780 lower than the Shaanxi provincial average. Because of the flat topography and poor flood management system in the area, flooding is common during rainy season. The heavy storm in August 2003 is a case in point that caused heavy casualties and stranded thousands of villagers for days. To help the government develop the western region and improve livelihoods in Luyanghu area, the proposed project will (i) rehabilitate the Luoxi desalination drainage system to remove salts from the soils, (ii) improve flood storage capacity of Luyanghu area to reduce flood risks to local people, and (iii) rehabilitate local wetland environment.

The project will help the Weinan City Government to improve land uses in Luyanghu area, and achieve its goals of attracting high-tech industrial investment, promoting eco-tourism, and creating job opportunities. The project impact will be sustained economic growth in Guanzhong Tianshui Economic Zone. The project outcome will be improved natural environment and rural livelihoods in Luyanghu area. The project outputs will be (i) rehabilitated drainage system and reduced soil salinity; (ii) improved flood storage capacity in Luyanghu; (iii) improved wetland management and rural livelihoods in poor rural area, depending on grant funds availability, such as the Global Environment Facility, or technical assistance funds from ADB; and (iv) supported project management.

The Weinan City Government has not been involved in an Asian Development Bank (ADB)-financed investment project as an executing agency; and is not familiar with ADB's project preparation requirements, such as economic and financial analyses, poverty and social assessment, gender mainstreaming, procurement requirements and procedures, disbursement guidelines, and safeguards requirement. It is necessary to provide a technical assistance (TA) to conduct due diligence of the Weinan City Government's project preparation work, and provide capacity development support to prepare the executing agency and the Weinan Luyanghu Construction Development Co. Ltd. (WLCDC), the implementing agency, for project implementation. The TA will also bring in concept and ideas of climate change adaptation to the Weinan City Government and local villagers, and develop their awareness and capacity for mitigation and adaptation measures.

The major output of the project preparatory technical assistance (PPTA) will be an investment design suitable for ADB financing and agreed upon by ADB and the government. The PPTA will address the following aspects related to the ensuing investment project: (i) assess the technical feasibility of the project; (ii) conduct due diligence on the financial and economic feasibility of the project; (iii) review safeguard requirements and documents prepared by the government; (iv) conduct social survey and consultations, as necessary; (v) conduct trainings on technical design of the project and ADB's project management requirements; and (vi) prepare project documents, including a feasibility study report (FSR), following the format of ADB's report and recommendations of the President (RRP), safeguard documents, a draft project administration manual (PAM), a facility operation and maintenance manual, and other supplementary documents as required.