Announcement of China Receives Hundred Million Dollars Loan to Improve Inland Waterways on June 21, 2001

China Receives $100 Million Loan To Improve Inland Waterways Contact Person: In Beijing Li Li 8610/65543361 ext. 2030 e-mail Lli2@worldbank.org In Washington Miriam Razaq (1-202) 458-2931 e-mail mrazaq@worldbank.org WASHINGTON, June 21, 2001--The World Bank today approved a US$100 million IBRD loan for the China Third Inland Waterways Project, which will help to reduce transport and energy bottlenecks in Hunan Province. The project will improve market access for the remote inland areas of the province, provide more efficient and economic inland waterway transport, and generate power to supplement the needs of the remote areas. Infrastructure improvement is a vital part of China's development agenda, particularly in the inland provinces. This project, a combination of navigation and hydropower, aims to improve the economic well-being of the majority of the poorest families along the Xiangjiang River in Hunan Province. The project will remove dangerous shoals, upgrade the 157-kilometer channel, and create a deeper channel along the Xiangjiang River in order to enhance the safety and productivity of the Inland Waterways system. These improvements will allow a more efficient mix of vessel sizes to use the waterways, and will reduce their travel time by up to 2.5 hours. In addition, almost 640.5 million kwh of power will be produced annually for Hunan Province, which will reduce the incidence of power outages. "The China Third Inland Waterways Project will benefit the nearly six million inhabitants of Hunan Province with less than a one dollar per day average income," says Toshiro Tsutsumi, Task Manager for the project. The project will influence the earning potential of vessel operators, shipping companies, and those manufacturers and producers in the nearby cities and counties that are within the project service area. Increases in wages and profits of the navigation community, and other businesses that depend on the waterways, will raise their consumption, and in turn stimulate the economic life in counties adjacent to the Xiangjiang River. The main components of the project include the construction of the Zhuzhou dam and shiplock complex; the provision of power-generating capability; upgrading of the Xiangtan-Zhuzhou section of the Xiangjiang Waterway by dredging; and technical assistance for training and the development of containerization along Xiangjiang River. The estimated total project cost of US$220.22 million will be financed by the IBRD loan [variable spread & rate single currency] of $100 million, with the Government of China financing the remaining costs.