KHL Group - International Construction

ADB loans China US$ 100 million to improve roads

Written by Richard High - 01 Jul 2009

The Asian Development Bank (ADB) has approved a US$ 100 million loan from its ordinary capital resources (OCR) for the Xinjiang Urban Transport and Environmental Improvement Project, China.

Counterpart funds of US$ 87.2 million will come from the cities of Altay, Changji, Hami, Kuytun and Turpan, who are the "target beneficiaries", according to an ADB statement

The loan will be used to construct or upgrade over 100 km of roads, install traffic signals, road safety systems and to construct public toilets and other sanitation facilities.

The project aims to improve urban infrastructure in Xinjiang, a poor region in the northwest of the country, and supports China's own drive to spur economic and environmental development in the region.

Xinjiang shares borders with eight countries and provides a gateway between China and Central Asia. It has 46 minority groups, which make up over 60% of its population.

It also has some of China's highest poverty rates and has lagged behind the country's coastal regions in benefiting from the economic boom. According to the ADB, poor urban infrastructure has deterred investment, degraded the environment and limited growth opportunities, especially in the promising tourism sector.

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 US$ 187.2 million. The executing agency is the Xinjiang Uygur Autonomous Region government and the project is expected to be completed by June 2014.

Since 1992, ADB has provided more than 39 loans worth nearly US$ 4.9 billion to China for urban infrastructure and environment projects.