ADB Project to Accelerate Green Transformation in China’s Shanxi Province

Image: Asian Development Bank

The Asian Development Bank (ADB) has approved a US$300 million equivalent loan to catalyse green and inclusive transformation in Changzhi Municipality, Shanxi Province, in the People’s Republic of China (PRC).

“The Shanxi Changzhi Low-Carbon Climate-Resilient Circular Economy Transformation Project aims to enhance urban livability and climate resilience for Changzhi residents.

It will reduce carbon emissions, increase recycling, and strengthen green small and medium-sized enterprises (SMEs) with enhanced opportunities for women. The project will also accelerate digitalization, particularly in municipal services and governance,” says ADB Principal Urban Development Specialist Stefan Rau.

“Knowledge gained from the project will serve as a model for replication in other heavy-industry regions. The project will benefit more than 1.4 million people and is aligned with the Paris Agreement.”

Changzhi is located in southeast Shanxi Province and is part of the Yellow River Ecological Corridor. Like most of the province, Changzhi’s development lags behind the PRC’s, with its economy largely dominated by coal and highly vulnerable due to the lack of economic diversification.

Its low rainfall also exposes it to wildfire and drought, exacerbated by climate change, with increasing depletion of its water table.

To improve urban livability, the project integrates urban planning across sectors and will invest in low-carbon, climate-resilient infrastructure and services. This includes treated wastewater reuse facilities, new public parks, and river rehabilitation as nature-based resilience solutions against flood risk and urban heat.

It includes sustainable transport with electric bus service on roads with new bus stops, safe sidewalks, and bicycle paths, built from construction waste. Multiagency and multifunctional information and communication technology platforms will facilitate coordination across agencies and improve government efficiency. They will also be used to offer recyclable materials to local industries.

The project will strengthen the private sector through green financing and improve the competitiveness of small and medium-sized enterprises, particularly those engaged in circular economy. Government institutions will be strengthened to help with low-carbon, climate-resilient circular economy development, action planning, and investments.

The total project cost is estimated at US$665 million, with US$365 million equivalent counterpart financing from the government, beneficiaries, and other sources. It is expected to be completed by 2030.