ADB loans to help China’s natural gas industry

The Asian Development Bank (ADB) has signed loans of up to US$450 million equivalent to help the People’s Republic of China (PRC) increase its use of natural gas for transport.

“Traffic volumes have been rising fast in the PRC, resulting in air pollution problems not just here but also in other parts of Asia. 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,” said Hisaka Kimura, Head of Private Sector Infrastructure Finance, East Asia Unit, in ADB’s Private Sector Operations Department.

Fuel stations

The ADB loans will be extended to China Gas Holdings Limited to build and operate up to 600 CNG and 200 LNG refuelling stations along major land transport corridors, and a further 20 LNG filling stations for river vessels by 2018. The PRC also has the world’s largest inland waterway transport network, which represents considerable potential for further green transportation, using LNG.

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

The assistance will also support the PRC’s drive to diversify its energy mix. The country has abundant undeveloped natural gas reserves, estimated at approximately 3.1 trillion m³.

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.

Adapted from press release by Katie Woodward

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