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China, People's Republic of: Heilongjiang Green Urban and Economic Revitalization Project (Additional Financing)

Sovereign (Public) Project | 49021-004 Status: Approved

The current project was approved on 5 December 2017 and declared effective on 4 September 2018. It is performing well and meets all criteria to be eligible for additional financing because (i) it is rated on track under the project performance system; (ii) each safeguard covenant is being complied with; (iii) the delivery of expected outputs is rated successful given that the initial actions such as advanced contracting and retroactive financing, disbursement of an initial advance to the advance account, subsequent liquidation and replenishment, and the preparation of the detailed engineering design and bidding documents are progressing as planned; and (iv) the management of risks is rated successful since all the risks in the Risk Assessment and Risk Management Plan were managed successfully.

Project Details

Project Officer
Stefan Rau East Asia Department Request for information
Country
  • China, People's Republic of
Sector
  • Agriculture, natural resources and rural development
 
Project Name Heilongjiang Green Urban and Economic Revitalization Project (Additional Financing)
Project Number 49021-004
Country China, People's Republic of
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3827-PRC: Heilongjiang Green Urban and Economic Revitalization Project (Additional Financing)
Ordinary capital resources US$ 150.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Sector / Subsector

Agriculture, natural resources and rural development / Land-based natural resources management

Transport / Urban public transport - Urban roads and traffic management

Water and other urban infrastructure and services / Urban flood protection - Urban sewerage - Urban water supply

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The current project was approved on 5 December 2017 and declared effective on 4 September 2018. It is performing well and meets all criteria to be eligible for additional financing because (i) it is rated on track under the project performance system; (ii) each safeguard covenant is being complied with; (iii) the delivery of expected outputs is rated successful given that the initial actions such as advanced contracting and retroactive financing, disbursement of an initial advance to the advance account, subsequent liquidation and replenishment, and the preparation of the detailed engineering design and bidding documents are progressing as planned; and (iv) the management of risks is rated successful since all the risks in the Risk Assessment and Risk Management Plan were managed successfully.

The government requested ADB to provide additional financing to cover the financing gap that emerged when originally planned cofinancing by the European Investment Bank (EIB) did not materialize despite EIB''s earlier indication of interest. The proposed additional financing was included as a 2019 firm project for $150 million (EURO133.929 million equivalent) from ADB''s ordinary capital resources in the country operations business plan for the PRC, 2019- 2021 to help finance outputs 3, 4, and 5. The project remains consistent with the country partnership strategy, 2016- 2020 for the PRC, and additional financing is essential to fully deliver the outputs and outcome.

Project Rationale and Linkage to Country/Regional Strategy

The project cities were important bases for coal mining and electricity production in the PRC, particularly between 1949 and 2013. Their fundamental reliance on coal mining and related industries made their economies vulnerable, especially when coal prices dropped steeply in 2013. Changing global and domestic energy and climate change policies also contributed to rapid economic decline, wage reductions, unemployment, urban poverty, and population loss in the project cities. In 2014, the project cities had an average per capita gross domestic product of CNY26,600, 33% lower than the average rate in Heilongjiang Province, which in turn was about 16% below the national average.

The project cities suffer from environmental degradation (pollution of soil, water, and air) caused by more than 60 years of coal mining. This, along with inadequate urban infrastructure and services, e.g., water supply, wastewater management, drainage, and district heating systems, makes for poor livability. Project cities lack adequate road maintenance, public transport, bus lanes, bus stops, and sidewalks; and urgently need road rehabilitation. Some rivers, especially in Hegang and Jixi, flood during heavy storms, have narrow channels, and are polluted by sediments and untreated discharge of domestic and industrial wastewater.

Value added by ADB assistance. ADB helped identify and comprehensively tackle key economic development challenges through non-coal diversification, sustainable and inclusive private sector development, and job creation. It enabled a holistic investment project that will generate cross-sector synergies. It prepared a diversification road map and an SME development and financing program to leverage ADB funds and strengthen the local finance sector. It contributes to regional public goods by preparing initial mining remediation strategies and identifying pilot projects that improve the environment and public health, and initiate a change of image from dirty coal cities to livable, clean, and green cities. ADB assessed the climate risk and proposed adaptation measures that are included in the overall project.

Strategic fit. The project builds on more than 20 years of partnership between ADB and Heilongjiang Province, including several strategic priority projects such as reducing pollution and flood risk in the Songhua River Basin with both public and private sector support. It supports government strategies to revitalize the PRC''s challenged northeastern region. Through its strategic and holistic approach, the project will support the (i) 13th five-year plans of the governments of the PRC, Heilongjiang Province, and project cities to transform the economy and improve financing of new industries and SMEs; (ii) Transformation Development Planning of Coal Cities in Heilongjiang Province, 2014 -2020 by assisting SMEs in non-coal pillar industries such as green food processing, graphite high-tech materials and products, machinery, tourism, trade, and logistics; and (iii) the National New-Type Urbanization Plan, 2014- 2020 by strengthening small and medium-sized cities. The project aligns with ADB policies, notably the (i) Strategy 2030 and its operational priority of livable cities by (a) providing integrated solutions to four cities to show their transformation from coal-based to diverse, green, and livable cities; (b) enhancing resilience to climate change shocks and stresses, e.g., reducing flood risk and increasing water safety; (c) strengthening institutions by building institutional knowledge and capacity; and (d) sharing best practices and innovation experiences both for replication in the PRC and for cooperation among developing member countries; (ii) country partnership strategy, 2016 -2020 for the PRC by supporting socially inclusive, environmentally sustainable, and economically competitive urban development; and (iii) various operational plans and environment operational directions.

Impact

Economy revitalized and diversified, and non-coal industries in the cities of Hegang, Jixi, Qitaihe, and Shuangyashan developed

Living environment, safety, and public health in cities of Hegang, Jixi, Qitaihe, and Shuangyashan improved

Project Outcome
Description of Outcome Non-coal economic activities and urban livability in project cities increased
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Capacity for BDS and integrated project planning and management developed

Sustainable investment in SMEs and access to finance in project cities improved

Key infrastructure and facilities for SMEs in non-coal industrial parks in project cities constructed

Remediation and environmental cleanup from mining impacts in project cities improved

Integrated urban infrastructure and services in project cities improved

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Hegang, Jixi, Qitaihe Shi, Shuangyashan
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Stefan Rau
Responsible ADB Department East Asia Department
Responsible ADB Division Urban and Social Sectors Division, EARD
Executing Agencies
Heilongjiang Provincial Government
People's Republic of China
Timetable
Concept Clearance 15 May 2019
Fact Finding 04 Mar 2019 to 08 Mar 2019
MRM 18 Jul 2019
Approval 26 Sep 2019
Last Review Mission -
Last PDS Update 26 Sep 2019

Loan 3827-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Sep 2019 - - 31 Aug 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 210.00 Cumulative Contract Awards
ADB 150.00 26 Sep 2019 0.00 0.00 0%
Counterpart 60.00 Cumulative Disbursements
Cofinancing 0.00 26 Sep 2019 0.00 0.00 0%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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