Asian Development Bank agrees loans to China to tackle pollution

Vehicles using lights travel on a bridge amid heavy smog after the city issued its first ever "red alert" for air pollution, in Beijing, China, December 8, 2015. REUTERS/Kim Kyung-Hoon (Reuters)

BEIJING (Reuters) - The Asian Development Bank (ADB) has agreed to loan China $430 million to support government efforts to reduce coal use and tackle the choking smog that regularly envelops the capital and other major cities, it said on Thursday. In the first of two loans, the bank will provide $130 million to Qingdao in the eastern province of Shandong for a project to use non-coal sources of energy for heating, cooling as well as power production and distribution. The second loan will provide $300 million to the greater Beijing capital region, which includes Beijing, Tianjin and Hebei province. Seven out of the 10 Chinese cities with the worst air quality are in Hebei, the country's biggest steelmaking region and a large consumer of coal. "Poor air quality has reached such a serious level that it is jeopardizing health and sustainable growth in the capital region," Satoshi Ishii, an ADB senior urban development specialist, said in a statement. ADB regards pollution as a pressing problem and wants to encourage governments to take measures to address the issue. Discussions with China began in January, but news of the loans comes the same week that the capital issued its first air pollution "red alert," banning heavy vehicles, restricting the number of cars on the road, advising schools to cancel classes, and requiring outdoor construction to stop. Coal-fired power accounts for three quarters of China's total generation capacity and is a major source of pollutants such as sulfur dioxide and nitrogen oxides, but the country has struggled to enforce restrictions on debt-laden generators as economic growth has slowed. (Reporting by Kathy Chen and Adam Rose in Beijing; Additional reporting by Lee Chyen Yee in Singapore; Writing by Josephine Mason; Editing by Estelle Shirbon)