ADB raises annual lending to China to $2 billion mark

Takehiko Nakao, ADB president. [Photo/VCG]

The Asian Development Bank is aiming to increase its sovereign lending to China to about $2 billion a year from 2016 to 2020, up from the annual average of $1.5 billion in the past five years.

"Our total lending, including lending to the private sector, will increase by about 50 percent in the coming years, up from $13 billion to $20 billion. If we keep the same ratio of increase here, our lending to China could also increase by up to 50 percent," ADB President Takehiko Nakao said on Monday.

The actual lending volume will depend on approval by the board of the bank of actual projects and programs, he said. In 2015, the bank's sovereign lending to China was $1.7 billion, accounting for 12 percent of its sovereign lending to all member countries.

He listed climate change and environmental protection as the top priorities of the ADB in deepening its partnership with China.

Last year, the bank approved its first policy-based loan of $300 million to China for air quality improvement in the Beijing-Tianjin-Hebei area, he said at the China Development Forum 2016 on Sunday.

Under this loan, Hebei province will issue a new emission standard for volatile organic compounds, requiring factories to introduce pollution reduction devices to production processes. Other policies under this loan include guidelines on converting coal to gas for power and heating, transport-related regulations, and enhanced environmental monitoring of polluting industries.

Speaking of ADB's support to regional cooperation and integration, he said it is also a strategic priority under the bank's new member partnership strategy. ADB can also cooperate closely with the Asian Infrastructure Investment Bank in this area.

"I had a very constructive discussion with Mr Jin (Liqun) of the AIIB. We agreed that Asia needs more infrastructure investment and we can cooperate through different ways including cofinancing. We also agreed that social and environmental considerations are important when we do projects, and the procurement system should be fair and competitive," Nakao said.

In its member partnership strategy, the ADB mentioned the importance of China not just as a beneficiary of the bank, but as a contributor.

China made a contribution of about $45 million to the Asian Development Fund managed by ADB, joining efforts to support poorer countries in the region for the year 2013-16 by giving them grants and concessional loans.