ADB Extends $450 mn Loan to China to Boost Gas Usage in Transport

The Asian Development Bank (ADB) has signed loans of up to $450 million to help China scale up its use of natural gas for transport to curb fast-rising emissions from automobiles and river freight.

The loan will be extended to China Gas Holdings Ltd. to build and operate up to 600 compressed natural gas (CNG) and 200 liquefied natural gas (LNG) refueling stations along major land transport corridors, and a further 20 LNG filling stations for river vessels by 2018, ADB said.

“Traffic volumes have been rising fast in the PRC, resulting in air pollution problems not just here but also in other parts of Asia,” said Hisaka Kimura, Head of Private Sector Infrastructure Finance, East Asia Unit, in ADB’s Private Sector Operations Department. “Helping motor vehicles, as well as vessels that ply inland waterways, switch from diesel to natural gas will mitigate air pollution, fine particulate matter [PM2.5] in particular.”

ADB’s assistance comprises a $150 million equivalent dual-currency loan in dollars and Chinese yuan, and a complementary $300 million equivalent dollar-yuan loan from participating commercial banks.

The assistance will also support the PRC’s drive to diversify its energy mix.

While the PRC’s natural gas supplies are increasing, demand remains unmet. ADB’s support is expected to encourage greater private sector participation in this sector and address bottlenecks in mainstreaming gas use for transportation, particularly in long-distance transport corridors that cross municipal and provincial boundaries, the Bank said.