China: ADB Loan to Finance Chao Lake Cleanup

A $250 million loan by the Asian Development Bank (ADB) to rehabilitate the fifth largest freshwater lake in the People’s Republic of China (PRC) will also test an eco-compensation program and a water emissions trading system aimed at controlling ubiquitous sources of rural water pollution.

Chao Lake bore the brunt of rapid local economic growth and urban development over the past 20 years. This project will help finance vital components of the government’s 12-year master plan to bring it back to life,” said Qingfeng Zhang, Lead Water Resources Specialist at ADB.

Chao Lake is an important source for industrial and agricultural water supply, water transport, tourism, and recreation in Anhui province. The national government identified it in 1996 as one of the three priority lakes in the PRC for environmental rehabilitation due to its poor water quality.

While industrial pollution has come under more regulation in recent years, pollution has yet to be controlled from urban areas and non-point sources, particularly from livestock operations, runoff of fertilizer and pesticide use, and rural settlements.

To help control sources of rural and agricultural water pollution, the project will develop an eco-compensation program to provide incentives for farmers to replace chemical fertilizers with organic fertilizers, and it will also test water emissions trading among farmers and companies for the control of water pollution in Chao lake.

The loan will also finance eight new wastewater treatment plants and a wastewater collection network to intercept sewage that currently flows untreated into the tributaries of Chao Lake. The loan will finance a solid waste collection and management system. The construction of artificial wetlands and habitats will further reduce excessive amounts of nutrients in Chao Lake.

The loan will promote integrated management of the lake by building the capacity of the newly-established Chao Lake Management Authority (CLMA), one of the first agencies in the PRC with authority to manage and enforce all aspects of lake quality and uses.

Press Release, November 16, 2012

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