Asian bank funds China’s 50.5-MW Erlongshan, 60-MW Dagushan

The Asian Development Bank (ADB) has approved up to US$50 million to help finance construction of the 50.5-MW Erlongshan and 60-MW Dagushan hydroelectric projects on the Heihe River in China’s Gansu Province.

The plants are part of the seven-plant Heihe River hydropower development scheme intended to provide cleaner and more reliable power to Gansu. Two plants already are in operation. Another, 102-MW Xiaogushan, is to be completed next year with ADB funding. (HNN 8/31/06)

The total project cost for Erlongshan and Dagushan is estimated at US$110 million, of which US$37.86 million is to be financed through commercial bank loans, while US$22.14 million is to come from the Zhangye city government and Heihe Hydropower Development Co.

ADB is providing a multi-tranche financing facility from its ordinary capital resources, with interest to be determined in accordance with its London Interbank Offering Rate (LIBOR) based loan facility.

ADB recruited consultants earlier this year to assist development of Erlongshan and Dagushan as part of US$500,000 in technical assistance to the Gansu Heihe Hydropower Development program. (HNN 5/12/06)

Erlongshan is expected to be one of the first eligible for carbon financing through the Asia Pacific Carbon Fund under the recently approved ADB Carbon Market Initiative.

Upon completion, the program is to avoid a million tons of coal use per year. It is expected to be eligible for generation of certified emissions reductions under the United Nations-backed Clean Development Mechanism (CDM) to avoid greenhouse gas emissions.

The ADB project officer is Ashok Bhargava, Energy Specialist/PAU, EAEN, Asian Development Bank, P.O. Box 789, 0980 Manila, Philippines; (63) 2-6326387; E-mail: For information, contact Deputy Director Zhang Xiaoping, Gansu Provincial Finance Bureau, International Division, Lanzhou, Gansu, China; (86) 931-8891042; Fax: (86) 931-8891043.

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