The Asian Infrastructure Investment Bank has approved a USD 250-million loan for a project that will reduce China's coal use by about 650,000 tons annually through connecting about 216,750 households in rural villages to the natural gas distribution network, the bank said in an official release on Monday.
"China's commitment to reducing its reliance on coal will change lives and improve the environment, and that is why we are investing in a project aligned with their ambitious plan," AIIB President Jin Liqun said.
Through investment in the project, AIIB is also showing commitment to help members to meet their environmental and development goals, especially their commitments under the Paris Agreement.
Upon completion and after subtracting the emissions of burning natural gas, the Beijing Air Quality Improvement and Coal Replacement Project is expected to reduce annual carbon dioxide emissions by 595,700 tons and particulate matter by 3,700 tons.
The investment in the project represents AIIB's first corporate loan. The project, undertaken by the Beijing Gas Group Company, will involve the construction of natural gas distribution networks in villages and low-pressure gas pipelines and household connections. The project is scheduled for completion in 2021.
"Enabling parts of rural China to transition off coal will have a marked impact on the quality of life for Beijing's residents," D.J. Pandian AIIB Vice President and Chief Investment Officer said while highlighting that the investment demonstrates the bank's commitment to helping members transition to cleaner sources of energy and its focus on enhancing the economic and social viability of Asia.
The coal-to-gas conversion will make rural households less reliant on coal for cooking and heating, improving indoor and outdoor air quality and lessening the risk of respiratory, and cardiovascular diseases in impacted regions, including Beijing.
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