The Asian Development Bank (ADB) has signed an agreement in partnership with 13 banks to support Beijing Enterprises Water Group Company Limited (BEWG) to promote high standard wastewater treatment and reuse in the People's Republic of China (PRC).

The $288 million B-loan agreement is the largest such loan arranged by ADB. The B-loan is part of ADB's financing package to the project, which includes an ADB-financed loan of $120 million signed last November, and up-scaled to $408million. Through the B-loan structure, ADB acts as the lender of record for commercial banks-allowing them to share ADB's preferred creditor status.

Hisaka Kimura, ADB Head of Private Sector Infrastructure Finance, East Asia Unit, said:

"A prime objective of the B-loan is to perpetuate our development mission with partner banks to promote reuse of treated wastewater as a strategic option for sustainable water management. We are pleased to work with 13 leading banks to address the PRC's water challenge."

The PRC's increasing demand for water highlights water scarcity. Per capita freshwater resources are low and annual per capita water endowments have been declining alarmingly. Pollution exacerbates water scarcity, especially in upstream areas where it can degrade sanitation in local communities which depend on local sources for water supply.

Under the project, BEWG will upgrade and operate wastewater treatment plants across the country to meet grade 1A standard, the most stringent wastewater treatment standard in the PRC. The treated wastewater can then be reused for both industry and urban environment needs, including machine cooling, boiler operation, and cleaning at construction sites.

The 13 banks are Australia and New Zealand Banking Group Limited, the Bank of Tokyo-Mitsubishi UFJ Ltd., BPI Capital Corporation, Industrial and Commercial Bank of China (Asia) Limited, Rabobank International, OCBC Wing Hang Bank Limited, Kookmin Bank Limited, Aozora Asia Pacific Finance Limited, State Bank of India, Chang Hwa Commercial Bank Ltd., KEB Asia Finance Limited, Shinhan Asia Limited, Taiwan Cooperative Bank, and ADB as the lender of record.