The Asian Development Bank (ADB) has signed a $60 million loan deal (in Chinese Yuan equivalent) with Maxwealth Financial Leasing Co., Ltd. (MWFL) to improve municipal and industrial wastewater treatment capacity and standards in the People’s Republic of China (PRC), through an innovative lease financing mechanism.
ADB’s assistance for the Industrial and Municipal Wastewater Treatment Project will provide MWFL with much-needed long-term funding to finance at least six industrial or municipal wastewater treatment plants across the PRC. This will increase the country’s overall wastewater treatment capacity and support technological upgrades to meet stricter wastewater treatment standards the government imposed in recent years.
“There is a need for bigger and better wastewater treatment facilities in the PRC as rapid urbanization and industrialization continue,” said ADB’s Unit Head for East Asia Private Sector Financial Institutions Biao Huang. “Our assistance to MWFL will build on ADB’s successful ongoing work to develop the PRC’s leasing industry and improve its wastewater treatment capacity.”
The PRC is one of the most water stressed countries in the world, with only 2,100 cubic meters of water available per person per year. Total wastewater discharge in the country increased by 65% from 41.5 billion cubic meters per year in 2000 to 68.5 billion cubic meters per year in 2013. As of 2017, the wastewater treatment rate in the PRC was 94% in cities and 49% in towns.
The project will benefit about 2.2 million people in urban areas. It addresses the gap from traditional financial institutions like banks for long-term financing for wastewater treatment equipment, which they don’t consider as collateral. ADB’s private sector operations have been actively supporting the leasing industry in the PRC to provide another source of financing for development projects in several sectors, and this loan is the first time ADB has used the leasing modality to support wastewater treatment in the PRC.
MWFL, a wholly owned subsidiary of Bank of Ningbo Co. Ltd., is a leasing company regulated by the China Banking and Insurance Regulatory Commission. Its business focuses on Zhejiang and Jiangsu provinces, with selected coverage in Beijing, Guangdong Province, and Shanghai.