HONG KONG, CHINA - The Asian Development Bank is partnering with 18 banks to help China Water Affairs Group Limited (CWA) to increase access and improve water efficiency in small- and medium-sized cities in the People's Republic of China (PRC).
The $100 million B loan agreement was signed today. The B loan is part of ADB's $200 million financing package to the project, which also includes an ADB-financed loan of $100 million. Through the B loan structure, the participating banks share with ADB the benefit of ADB's preferred creditor status.
Under the project, CWA will turn around multiple water utilities formerly owned by municipal governments, rehabilitating distribution pipelines, installing meters for all customers, instilling commercial management practices, and improving access to safe water. The loan is expected to benefit five million customers, including poor households, who currently have limited access to safe drinking water.
The PRC government is actively promoting public-private partnership for water supply chain but around 90% of municipal distribution networks are still owned by local governments.
"Water distribution is a new frontier for private sector participation in Asia. A prime objective of B loan is to share our development mission with our partner banks. We are pleased to work together with 18 banks for enhancing access to cleaner piped water in smaller cities," said Hisaka Kimura, Principal Investment Specialist in ADB's Private Sector Operations Department.
The fund is provided by the Royal Bank of Scotland plc, Korea Development Bank, Chang Hwa Commercial Bank, Ltd., Chinatrust Commercial Bank, Ltd., First Commercial Bank, Taiwan Cooperative Bank*, KEB Asia Finance Limited, Kookmin Bank Hong Kong Limited, Woori Global Markets Asia Limited, Hang Seng Bank Limited, Mega International Commercial Bank Co., Ltd., Taiwan Business Bank*, Bank SinoPac, Industrial and Commercial Bank of China (Asia) Limited, Land Bank of Taiwan*, Sunny Bank Ltd., Taichung Commercial Bank, The Bank of East Asia, Limited, and ADB as the lender of record.
* These are banks in the ADB member referred to as Taipei,China.