The Asian Development Bank (ADB) has signed loans of up to $450 million equivalent to help the People’s Republic of China (PRC) scale up its use of natural gas for transportation to curb fast-rising emissions from vehicles and river freight. The ADB loans will be extended to China Gas Holdings Ltd. to build and operate up to 600 CNG and 200 LNG stations along major corridors, and a further 20 LNG facilities for river vessels by 2018.
“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, which will support the PRC’s drive to diversify its energy mix, 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.
While its natural gas reserves are increasing, China is one of the lowest per capita gas consumption countries globally. 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.