Manila, Philippines (BBN)- The Asian Development Bank (ADB) will extend a US$150 million loan to help the Inner Mongolia Autonomous Region of the China improve its aging coal-fired heating systems, making them more energy efficient and less polluting.
ADB’s Board of Directors on Monday approved the loan for phase II of the Inner Mongolia Autonomous Region Environment Improvement Project. Along with closing down old heating systems and installing clean burning, cost-effective boilers, it will construct transmission and distribution pipelines and other related infrastructure.
It will also build natural gas pipelines and other equipment to provide clean energy to Keyouqian, one of the Region’s poorest ‘banners’, or administrative areas, an ADB press statement said.
The Inner Mongolia Autonomous Region has about 25 per cent of China‘s total coal reserves that it taps both for its own needs and to generate electricity for export to other areas.
However, its district heating systems, many of which were installed in the 1970s, have become unreliable, costly and major contributors of harmful air pollutants, including sulfur dioxide and nitrogen oxides, which cause acid rain.
The ADB’s loan from its ordinary capital resources makes up 45 percent of the total project cost of just over $333 million.
The loan has a 24-year term with a grace period of four years and annual interest determined in accordance with ADB’s LIBOR-based lending facility. A further 35.5 percent of the cost will be borne by the implementing agencies in the form of equity, while domestic bank loans will provide the remainder.
BBN/SSR/SI/AD-09Aug10-1:04 pm (BST)
