Manila, Philippines (BBN)- The Asian Development Bank (ADB) is providing a $60 million loan to improve water efficiency in three agricultural counties in Qinghai Province in the west of the People’s Republic of China (PRC).

Qinghai Province, located in the upper Yangtze and Yellow River valleys, is one of the poorest provinces in the PRC because of its remote location, mountainous landscape, and extreme climate, an ADB announcement said on Monday.

Two thirds of its population live in rural areas but farming has suffered in recent years because water has become scarcer and the water infrastructure is poor. That has reduced wheat yields to around 76% of the national average and exacerbated poverty. Around 39 percent of those in the targeted counties of Hualong, Jianzha, and Xunhua live on less than the PRC government’s official poverty line of CNY1,196 per year.

ADB’s loan is part of a $223.6 million project to build four new main irrigation canals, branch canals, and on-farm works to convert the aged small lift irrigation systems to gravity irrigation systems.

The ADB estimates that about 130,000 farmers will benefit directly from the project. The vast majority of the farmers in the project area are from the Hui, Salar, and Tibetan ethnic groups which have inhabited the region for more than 700 years.

BBN/SSR/AD-21Mar11-11:56 am (BST)