ADB | 26 January 2021

The Asian Development Bank (ADB) has approved a $200 million loan to help improve the environment and boost green development in rural areas of Xiangxi Prefecture (Xiangxi), Hunan Province, in the People’s Republic of China (PRC).

“Xiangxi is one of the poorest regions in the PRC but plays a key role in connecting the central and western regions of the PRC and the Yangtze River as part of the Yangtze River Economic Belt and special economic zones in the southern provinces,” said ADB Principal Water Resources Specialist Yoshiaki Kobayashi. “The project will play a demonstrative role for rural vitalization, through inclusive rural economic development, as well as generate knowledge and disseminate best practice.”

In many rural areas of the Yangtze River Economic Belt, agricultural production and rural livelihoods have lagged behind industrial production and urban livelihoods, and income inequality and poverty are still persistent.

All of Xiangxi’s seven counties are national poverty counties designated by the Government of the PRC. A lack of wastewater and solid waste management negatively impacts the living environment and health of Xiangxi’s rural residents. Only about one-seventh of the wastewater generated in Xiangxi is treated, while about a quarter of the villages do not have solid waste collection or processing facilities. Almost half of households do not have sanitary toilets.

The mountainous landscape in Xiangxi makes farming unsuitable and unprofitable. But Xiangxi has rich local-featured vegetation, which yields citrus, kiwifruit, camellia, tea, and herbal medicine. However, yields are highly variable and of low value because of the poor quality of seeds and seedlings, use of chemical fertilizer and pesticide, outdated agricultural and forestry production and management systems, and inadequate cold chains.

To improve rural waste and sanitation management, the project will construct and operate wastewater management systems for about 45,800 households using innovative technologies (e.g., distributed wastewater management systems), and innovative arrangements such as a public–private partnership; boost solid waste management by establishing garbage transfer stations and rural garbage management teams, of which at least 30% are led by women, serving about 87,500 households; and provide sanitary toilets to about 5,500 rural households.

It will also develop local-featured agricultural and forestry products grown with organic fertilizer and/or low-chemical fertilizer and pesticide, constructing research and development facilities, seedling breeding areas, and integrated water and fertilizer management systems.

To add value to local-featured agricultural and forestry products by improving value chains and promoting ecotourism, the project will finance the construction of facilities in six locations for storage, cold storage, processing, packaging, exhibition, e-commerce, customer service, and/or logistics; and improve resources for ethnic minority-inclusive ecotourism. It will also construct sightseeing footpaths, tourist facilities such as rest pavilions, public toilets, and parking lots; and ethnic minorities’ historical and cultural exhibition facilities, sales plazas, and supermarkets for local-featured agricultural and forestry products.

A total of 422,022 residents in the project area, including 108,702 poor or low-income people, will directly benefit from the project. It is estimated that 1,317 skilled and 5,612 unskilled local jobs will be created during project construction and operation.

Total project cost is $420.73 million, of which the Government of PRC will provide $220.73 million. The project is expected to be completed by the end of 2026.