China, People's Republic of : Beijing-Tianjin-Hebei Air Quality Improvement-Hebei Policy Reforms Program

Sovereign Project | 49232-001

The program supports the Hebei provincial government (HPG) in increasing its efforts to improve air quality in the greater capital area, comprising Beijing municipality (Beijing), Tianjin

municipality (Tianjin), and Hebei province (Hebei) (together, the BTH region). The program will (i) reduce emissions from major air pollution sources, (ii) strengthen environment policy and the institutional framework for implementation, and (iii) enhance employment support for inclusive industrial transformation. The program will provide HPG with a solid basis to introduce incremental reforms under the PRC's 13th Five-Year Plan, 20162020, while enabling HPG to consolidate and accelerate necessary actions during 20152016.

Project Details

  • Project Officer
    Bo An
    East Asia Department
    Request for information
  • Country/Economy
    China, People's Republic of
  • Modality
  • Sector
    • Energy
Project Name
Beijing-Tianjin-Hebei Air Quality Improvement-Hebei Policy Reforms Program
Project Number
49232-001
Country / Economy
  • China, People's Republic of
Project Status
Closed
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 3356-PRC: Beijing-Tianjin-Hebei Air Quality Improvement-Hebei Policy Reforms Program
Source Amount
Ordinary capital resources US$ 300.00 million
Loan: Beijing-Tianjin-Hebei Air Quality Improvement-Hebei Policy Reforms Program
Source Amount
KfW Bankengruppe US$ 166.65 million
World Bank US$ 200.00 million
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
  • Regional integration
Drivers of Change
  • Governance and capacity development
  • Partnerships
Sector / Subsector
  • Education / Education sector development - social protection initiatives

  • Energy / Energy sector development and institutional reform - Energy utility services - Oil and gas transmission and distribution - Renewable energy generation - biomass and waste

  • Public sector management / Public administration

  • Transport / Transport policies and institutional development

Gender
No gender elements
Description

The program supports the Hebei provincial government (HPG) in increasing its efforts to improve air quality in the greater capital area, comprising Beijing municipality (Beijing), Tianjin

municipality (Tianjin), and Hebei province (Hebei) (together, the BTH region). The program will (i) reduce emissions from major air pollution sources, (ii) strengthen environment policy and the institutional framework for implementation, and (iii) enhance employment support for inclusive industrial transformation. The program will provide HPG with a solid basis to introduce incremental reforms under the PRC's 13th Five-Year Plan, 20162020, while enabling HPG to consolidate and accelerate necessary actions during 20152016.

Project Rationale and Linkage to Country/Regional Strategy

In 2013, the BTH region, with a population of 109.2 million, generated a gross domestic product (GDP) of CNY6.2 trillion, accounting for 10% of the national total. While the region is an engine of socioeconomic development for the PRC, poor air quality jeopardizes its sustainable growth. The concentrations of sulfur and nitrogen oxides, ozone, and inhalable particulate matter of less than 2.5 micrometers in diameter (PM2.5) reached levels that may cause significant public health impacts. In 2014, the annual average PM2.5 concentration was 93.0 micrograms/cubic meter, several times higher than in cities of developed countries. In the BTH region, PM2.5 is locally generated and formed in the atmosphere by emissions from (i) industries, (ii) continuous coal burning for electricity generation and heating boilers in urban and rural areas, (iii) increasing motor vehicle emissions, and (iv) the burning of agricultural biomass waste. The topographical and meteorological characteristics of the region are also conducive to the buildup of air pollution.

An imbalanced socioeconomic structure in the BTH region has made Hebei the main source of air pollution and a clear bottleneck for air pollution control. Hebei's economy relies heavily on polluting secondary industriescoal-fired energy generation, iron, steel, coking, and cement. In 2014, 7 of the 10 cities with the worst air quality in the PRC were in Hebei. Hebei emits more than 80% of total primary PM2.5 in the BTH region, and three times more nitrogen oxidesone of the precursors of secondary PM2.5 than the total of Beijing and Tianjin. To improve the region's air quality, the first priority is to address Hebei's problems, while improving coordination of air quality improvement efforts in the region.

As a national priority, the central government is scaling up its efforts to address this environmental challenge together with climate change. The national air quality standards were updated in 2012 to be equivalent with those in most developed countries. The new environmental protection law came into force in 2015. In 2013, the State Council issued the Action Plan on Prevention and Control of Air Pollution, 2013-2017. In 20132014, the central government budgeted CNY15 billion to improve the air quality in six northeastern provinces, including the BTH region. In the five-year Hebei Clean Air Action Plan (HCAAP), HPG commits to reduce by 2017 (i) PM2.5 concentration by 25% from the 2012 level, (ii) steel-making production capacity by 60 million tons, (iii) cement production capacity by 60 million tons, (iv) coal consumption by 40 million tons, and (v) glass production capacity by by 38 million weight boxes.

The introduction of the HCAAP and urgent air pollution mitigation requirements led to Hebei's fragmented policy framework. Pollution reduction efforts during 2013-2014 only resulted in several short-term 'end-of-pipe policy actions and the strengthening of legal enforcement against polluting industries to reduce production capacity and the number of old vehicles. In 2014, Hebei was the PRC's second-largest coal consumer with 90% of energy supplied by coal, much higher than the national average of about 70%. During 20132014, transport policies did not target the key issue of the increasing number of motor vehicles. Both urban and rural areas depend on old and inefficient infrastructure Both urban and rural areas depend on old and inefficient infrastructure for cooking and heating. The existing policies offered few alternatives to the seasonal burning of agricultural biomass waste. To remove constraints and enhance long-term development prospects, Hebei needs (i) a basic and comprehensive policy framework, (ii) well-coordinated actions to gradually enhance policies, (iii) investments to better manage air pollution reduction efforts, and (iv) private sector participation in financing necessary investments for industrial modernization.

Impact

Air pollution in the BTH region reduced

Public health in the BTH region improved

(Action Plan on Prevention and Control of Air Pollution in Hebei Province, 20132017)

Project Outcome

Description of Outcome

Framework for incremental policy and investment actions in Hebei to improve air quality in the BTH region strengthened

Progress Toward Outcome
Implementation on track.

Implementation Progress

Description of Project Outputs

1. Policies and actions to reduce air pollution from key sectors issued and approved

2. Environmental policy and institutional framework for implementation strengthened

3. Employment promotion for inclusive industrial transformation enhanced

Status of Implementation Progress (Outputs, Activities, and Issues)
The one time tranche release to IA of $300 million was completed on 3 June 2016.
Geographical Location
Hebei

Safeguard Categories

Environment
C
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects

Due diligence during preparation concluded that the program's policy actions do not entail any involuntary resettlement or have any adverse impact on indigenous peoples or the environment.

The agreed policy actions would contribute to reducing Hebei's annual coal consumption by approximately 12.4 million tons of standard coal, representing 4% of Hebei's total consumption of 287 million tons in 2012. Estimated annual reductions of air pollution and greenhouse gas emissions against 2012 baselines will be 18 million tons of carbon dioxide, 170,000 tons of primary PM2.5 (19% reduction), 546,000 tons of sulfur dioxide (33%), 289,000 tons of nitrogen oxide (14%), and 71,000 tons of VOCs (5%). Policy actions focusing on upgrading air quality monitoring systems may further reduce emissions by improving regulatory enforcement and environmental supervision, but their actual contribution is difficult to quantify and thus not included in the estimates.

Involuntary Resettlement
Due diligence during preparation concluded that the program's policy actions do not entail any involuntary resettlement or have any adverse impact on indigenous peoples or the environment.
Indigenous Peoples
Due diligence during preparation concluded that the program's policy actions do not entail any involuntary resettlement or have any adverse impact on indigenous peoples or the environment.

Stakeholder Communication, Participation, and Consultation

During Project Design
Program preparation involved consultation with key stakeholders such as academic professors, and provincial and municipal government officers from human resources and social security bureau, development reform commission, energy bureau, agriculture department, transport bureau, environmental protection bureaus, and the health department in Hebei province. Civil society organizations are not included in the policy actions.
During Project Implementation
The stakeholders will continuously be engaged during the implementation, especially in the process of completing the agreed policy actions and the performance monitoring at the project completion stage.

Business Opportunities

Consulting Services
Not applicable
Procurement
Not applicable

Contact

Responsible ADB Officer
Bo An
Responsible ADB Department
East Asia Department
Responsible ADB Division
Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Hebei Provincial Government

Timetable

Concept Clearance
01 Sep 2015
Fact Finding
07 Sep 2015 to 11 Sep 2015
MRM
12 Oct 2015
Approval
10 Dec 2015
Last Review Mission
-
Last PDS Update
30 Sep 2016

Funding

Loan 3356-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Dec 2015 23 Feb 2016 20 May 2016 30 Jun 2017 - 03 Jun 2016
Financing Plan
  Total (Amount in US$ million)
Project Cost 4,431.50
ADB 300.00
Counterpart 4,131.50
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2022 300.00 0.00 100%
Cumulative Disbursements 17 Jun 2022 300.00 0.00 100%

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

None currently available.


Related Publications

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The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.