World Bank approves US$500m loan to curb smog in China

[BEIJING] The World Bank agreed to lend US$500 million to China to fund projects that can reduce air pollution in and around Beijing.

The projects are tied to renewable energy, pollutant reduction and electric and compressed or liquefied natural gas vehicles in the region around the capital, which also includes Tianjin, Hebei and neighboring areas, the Washington-based lender said in a statement.

The loan is part of a broader plan to finance US$1.4 billion for such projects over the next six years, with another $500 million from Huaxia Bank Co. The remainder comes from equity contributions of other institutions, the World Bank said.

Public anger has forced China, the world's biggest carbon emitter, to boost renewable energy to cut reliance on coal and use cleaner fossil fuels. China's air pollution is mainly caused by coal consumption, Environmental Protection Minister Chen Jining said earlier this month.

About 80 per cent of 338 monitored Chinese cities, including Beijing, failed to meet official standards last year, according to the Environment Ministry.

China intends to get 15 per cent of its energy from renewables and nuclear by 2020, up from 12 per cent last year.

Evidence is mounting that China's efforts to cut smog are starting to have an impact. The nation consumed about 4 per cent less coal last year while renewable energy from solar power grew almost three-quarters.

BLOOMBERG