AIIB Approves $250mn Loan for China Gas Project

Hoping to reduce China’s coal use by 650,000 metric tons/yr, Beijing-based Asian Infrastructure Investment Bank (AIIB) has approved a $250mn loan for a project that will connect about 216,750 households in about 510 rural villages to the natural gas distribution network, it said December 11.

The investment in the project represents AIIB’s first corporate loan. The project, undertaken by the Beijing Gas Group Company, will involve the construction of natural gas distribution networks in villages and low-pressure gas pipelines and household connections. The project is scheduled for completion in 2021. 

"China’s commitment to reducing its reliance on coal will change lives and improve the environment, and that is why we are investing in a project aligned with their ambitious plan," said AIIB president Jin Liqun. "With our unwavering commitment to helping members meet their environmental and development goals, especially their commitments under the Paris Agreement, it is only fitting that our first investment in China will introduce sustainable infrastructure that will reduce greenhouse gas emissions and help vitalise one of the most important economic hubs in Asia." 

AIIB expects the coal-to-gas conversion will make rural households less reliant on coal for cooking and heating, improving indoor and outdoor air quality and lessening the risk of respiratory, cardiovascular and ischemic heart diseases in impacted regions, including Beijing.

The move from coal to natural gas in China has resulted in a surge in country’s gas imports this year. During the January-November period, the accumulated import of natural gas was 60.70mn mt, up 26.5% year on year, according to China’s statistics bureau. These figures are already higher than the total imports in the whole of 2016 (54mn mt).