Asian Infrastructure Investment Bank (AIIB) approved a $250 million loan to decrease China's coal use by increasing natural gas usage, AIIB said on Monday.
With the loan, China will reduce coal usage by about 650,000 tons annually by connecting about 216,750 households in approximately 510 rural villages to the natural gas distribution network, the bank said.
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. Children, women, the sick and the elderly stand to benefit primarily as they are the most vulnerable to these risks.
Beijing Air Quality Improvement and Coal Replacement Project is expected to reduce annual carbon dioxide emissions by 595,700 tons once the project is completed.
"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," Jin Liqun, AIIB's president was quoted as saying.
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. Gas consumption meters will also be installed. The project is scheduled for completion in 2021.
The investment in the project represents AIIB's first corporate loan, the bank said.
"Enabling parts of rural China to transition off coal will have a marked impact on the quality of life for Beijing's residents," D.J. Pandian, AIIB vice president and chief investment officer said.
By Huseyin Erdogan