ADB loan for Chinese towns and cities

By Becca Wilkins21 December 2009

Asian Development Bank

Asian Development Bank

The Asian Development Bank (ADB) will loan US$ 100 million to a project that aims to help develop small towns and cities in Shanxi Province, China.

The ADB loan covers 45% of the total cost of the Shanxi Small Cities and Towns Development Sector Project - valued at US$ 225 million, which aims to help improve infrastructure, city services and the environment in seven cities and towns within the province.

County and city governments will contribute US$ 124.5 million under the ADB's Water Financing Partnership Facility (WFPF), with the governments of Australia, Austria and Norway supplying a US$ 250000 grant.

In an ADB statement it said the government plans to develop secondary towns and cities to help absorb the millions of migrants that flock to urban areas each year in search of work. The project will also help narrow the urban-rural income gap.

Amy Leung, director of Urban and Social Sectors for ADB East Asia said, "The project will increase the economic, social and environmental sustainability of small towns and cities by improving urban infrastructure and municipal services which will help attract investment into employment-intensive industries and services, improve living conditions and the environment and extend the benefits of growth to all residents."

Initially the project will focus on the counties of Pingyao and Youyu and in Wutong town. A new urban housing area will be developed for 30000 residents in Wutong and investment will also be made into a new natural gas supply. Schools will be built, water supplies and sewage management will be upgraded and roads will be constructed.

The ADB said the project, which is due for completion at the end of 2015, will provide better urban services and facilities to around 250000 people in the core project towns and cities, while around 380000 people in the surrounding rural areas will benefit from new employment opportunities and economic development.

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