The Asian Development Bank (ADB) has approved a $200 million loan to help mitigate ecological and environmental risks in the Mulan River Basin in the People’s Republic of China.
“The Mulan River Basin faces growing water supply shortages, pervasive flood risks, loss of ecosystem services, and serious environmental degradation,” said ADB Water Resources Specialist for East Asia Xueliang Cai. “The project will demonstrate principles and practices of sustainable ecological improvement and environmental management or EIEM in the river basin.”
The Mulan River is a main river in Fujian Province and was once among its most polluted. Flood management, ecological conservation, and water quality improvement have been primary government interventions in the river basin. However, climate change is expected to result in more frequent and severe floods and droughts, causing more economic and environmental damage in the area.
The project aims to strengthen institutional capacity for environmental management. It will support county-level integrated environment management and climate change adaptation action plans and associated capacity building and public awareness raising. It will also aim to establish a one-Mulan smart environmental management digital platform that will integrate the management of water resources, disaster risks, wastewater, drainage, solid waste, and forests.
The project aims to strengthen institutional capacity for environmental management
An innovative financing mechanism will also be piloted to address insufficient long-term investments in EIEM in the Mulan River Basin. This will involve establishing a tailor-made land value capture method in combination with a financial intermediation loan for funding investments in EIEM and operationalizing a market-oriented financing mechanism for EIEM.
The project will help improve the infrastructure in Xianyou County through investments in catchment protection, forest conservation, water supply, urban water environment and flood risk management, and solid waste management facilities, benefiting 1.18 million residents.
Total project cost is $ 577.35 million, with $377.35 million in counterpart financing from the government and beneficiaries. It is expected to be completed in 2028.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.