China receives $360 Million for two loans for flood protection and urban environment

News and Press Release
Originally published
June 28, 2000 - The World Bank's Board of Executive Directors approved two loans yesterday totaling $360 million for two projects - the Yangtze Dike Strengthening project (US$210 million) and the Hebei Urban Environment project (US$150 million) - which will bring great environmental and social benefits to millions of Chinese in rural and urban areas. These projects complement two projects approved earlier this month - the Second Beijing Environment project (US$349 million) and Chongqing Urban Environment project (US$200 million) - and fulfill key objectives of the World Bank's development strategy in China, including safeguarding the environment, reducing infrastructure bottlenecks, and improving people's lives.
The Yangtze Dike Strengthening Project will help protect the river bank of the flood-prone Yangtze River against erosion and will improve critical sections of existing main dikes in order to protect properties and lives in Hunan and Hubei provinces - where 75 million people rely upon river dikes for flood protection. The project will do this by: strengthening river bank and flood protection dikes and rehabilitating flood gates and cross dike structures; providing flood control facilities for dike operation and maintenance and developing operations and maintenance capacity at the provincial and municipal levels; expanding dike monitoring systems and developing emergency preparedness systems; and enhancing self-financing through flood levy collection from the beneficiaries for operation and maintenance of dikes.

"The 1998 flood of the river affected some 21 million people, displaced 4 million, and destroyed 1.3 million houses, factories, and commercial centers, causing nearly $20 billion in damages," said project task manager Daniel Gunaratnam. "This project aims to help China improve its systems of flood protection and response; dike management and operation along the Yangtze, in order to help mitigate the terrible social and financial costs a future flood might bring. We estimate that the project's flood protection measures will benefit an area of land roughly the size of 2.1 million hectares, and that the project will improve the quality of life for over 15 million people through protection of houses, schools, public and commercial buildings and infrastructure facilities such as airports, ports, railroads, and highways."

An environmental impact component was designed as part of the project in order to address potential adverse environmental impacts - including impacts on natural physical resources, natural ecological resources, economic development, quality of life standards, and global environmental issues - and develop control measures to mitigate any possible adverse affects. An environmental management plan has also been developed as an integral part of the Environment Impact Assessment (EIA).

The overall project cost of US$545.5 million will be financed with US$335 million from the Government of China. The IBRD loan of US$210 million is being made at the Bank's standard interest rate for LIBOR-based US dollar single currency loans with a maturity of 20 years, including a 5-year grace period

The Hebei Urban Environment Project aims to provide a safe environmental setting to sustain the long-term economic growth of urban areas in Hebei Province. It will do this by supporting the province in implementing a long-term urban environmental services improvement program that will: help Hebei recover from past environmental degradation of water and land resources, provide an adequate supply of safe water to its growing urban population and economy, and ensure sustainability of service delivery through institutional and financial reforms.

Through a program of wastewater management, upgrading and expansion of water supply, environmental pollution control, and institutional strengthening and training, this project aims to eventually reduce the pollution load from the urban sector and expand the supply capacity for safe water in urban areas. It will also work to strengthen the financial viability and institutional autonomy of municipal service companies. The project will help the Hebei government put in place policies, institutions, and infrastructure to ensure improved delivery of urban services in an environmentally-sustainable manner, during a period of strong economic growth in the province. Overall, a population of 2.9 million people will benefit, while beneficiaries from improved water supply number 950,000 people and beneficiaries from wastewater collection and disposal number 1.6 million people.

The US$293 million project will be financed by a Government contribution of US$143 million and the IBRD loan of US$150 million. The IBRD loan is being made at the Bank's standard interest rate for LIBOR-based US dollar single currency loans with a maturity of 20 years, including a 5-year grace period.

Previous projects include:

The Second Beijing Environment Project ($349 million IBRD; GEF grant $25 million equivalent) will bring enormous health benefits to all residents of the urban area of Beijing by providing air pollution control and wastewater management. The project will assist the efforts of the municipal government to alleviate air and water pollution in Beijing by: converting scattered coal-fire boilers to natural gas boilers; promoting energy conservation heating systems; providing wastewater collection and treatment to the entire Liangshi River basin, which covers over a quarter of the city; and strengthening environmental management in Beijing. If successful, the project and the other parallel actions would turn Beijing's air and water quality from that barely acceptable for industrial zones to ones that comply with WHO guidelines.

The $200 million Chongqing Urban Environment Project will improve the urban living conditions of 3 million poor people in Chongqing City, Fuling, Wanzhou, and Nanbin through supporting basic urban services of wastewater management. The drinking water supply of Chongqing and Fuling will be protected and the water supply in the project cities of Nanbin and Wanzhou enhanced. In particular, public health will be protected through the provision of a cleaner environment by improving systems of wastewater and solid waste management in a sustainable way; the Municipal Government will significantly reduce the current risks to the people of Chongqing from water borne diseases and unsanitary environmental conditions.