ADB's US$100 Million B-Loan to CWA for Improvement of Water Supply in Small and Medium-sized Cities of the PRC
HONG KONG, Feb. 1, 2013 /PRNewswire/ -- The Asian Development Bank ("ADB") today signed a US$100 million B-Loan Facility agreement with China Water Affairs Group Limited ("CWA") (stock code: 00855.HK). The proceeds from the loan will be used to improve water supply in second and third-tier cities in the People's Republic of China ("PRC").
The two-phase financing cooperation between ADB and CWA involves the provision of a total of US$200 million loan by ADB to CWA. It is part of ADB's efforts to support private sector's participation in water distribution for boosting water treatment capacity and enhancing water efficiency in the PRC. ADB provided a US$100 million direct loan (A-Loan) to CWA in July 2011. This US$100 million B-Loan Facility is another part of their financing cooperation. The Royal Bank of Scotland plc is the lead manager of this syndication loan, while ADB acts as the lender of record for participating commercial banks.
CWA will use the proceeds from ADB's loans to acquire, upgrade, expand and operate water networks in small and medium-sized cities of the PRC. It aims to increase water treatment capacity and improve water efficiency of second and third-tier cities in the PRC, with about 5 million customers are expected to benefit from such move.
The PRC's urban population has more than tripled in the past three decades as the urbanization process in the country is gaining momentum. Many small and medium-sized cities have to speed up the development of water supply facilities to boost water treatment capacity in order to meet their rising demand for water. Meanwhile, widespread waste and inefficiencies of water supply services are commonplace, as reflected in poor metering and leaky pipes. There is a pressing need to improve water supply facilities.
"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 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 Development.
"Private sector can play a more important role in improving the efficiency and quality of city water services. Nevertheless, its participation in China's water sector remains low. We are glad to work together with ADB to accelerate our expansion of city water supply operations in the country. Our move echoes the government's initiative outlined in its Twelfth Five-year plan to upgrade and improve water domestic supply facilities and capacity, thereby making people better off," said Duan Chuan Liang, Chairman of CWA.
The Asian Development Bank, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members -- 48 from the region. In 2011, ADB approvals, including co-financing, totaled US$21.7 billion. In addition, ADB's ongoing Trade Finance Program supported $10.6 billion in trade.
China Water Affairs Group Limited is principally engaged in waterworks investment and operations as well as other related businesses in the PRC, which include urban water supply, water supply systems management, meter installation and related value-added businesses. The Group's business network covers more than 20 cities in the PRC including Guangdong, Jiangxi, Henan and Jiangsu, with daily water treatment capacity of over 4 million cubic meters. It is listed on the Main Board of The Hong Kong Stock Exchange.
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SOURCE China Water Affairs Group Limited