Improving Public Infrastructure, Services for 1.50 Mln Residents

Today the World Bank Board of Executive Directors approved a loan of US$150 million to the People's Republic of China to improve public infrastructure and services for the residents and businesses in selected small towns in Guangdong, Hunan and Gansu Provinces.

Small towns play a significant role in China's economic development and urbanization process. As a group, they absorb 40 percent of the country's rural-urban migrants and employ up to 70 percent of the labor force. Small town development is an integral part of the Chinese Government's strategy for inclusive growth and balanced rural and urban development.

However, small towns still face a number of challenges. For further growth, they need new and better roads, increased water supply and wastewater treatment capacities, and new marketing infrastructure and support services for small and medium enterprises. They need to improve waste management, optimize use of scarce resources and adopt clean and environmentally friendly technologies to reduce greenhouse gas emissions and mitigate climate change impacts.

The Integrated Economic Development of Small Towns Project aims to assist the governments of the three provinces to adopt and demonstrate comprehensive economic development approach to address these challenges, promote effective integration of urban and rural development, and boost socially, economically and environmentally sustainable development in small towns.

The project will finance construction or rehabilitation of urban and rural roads; expansion or modernization of water supply and wastewater treatment facilities; improvement of solid waste management system; river embankment rehabilitation; expansion and modernization of irrigation infrastructure; and development of agricultural markets, commercial infrastructure and integrated service centers.

"By improving roads, water supply, waste management and other services, the project will help create conditions for increasing employment and incomes and enhancing the quality of life in the small towns. The integrated and innovative approaches adopted by the project can serve as a model for small town development in other provinces," said World Bank's Rural Development Specialist Cao Wendao who manages the project.

The project will be implemented in 28 small towns with a total population of about 1.5 million, bringing direct and indirect benefits to the residents and businesses.

The total project cost is estimated to be about US$300 million, with the World Bank loan financing half the amount and the other half covered by counterpart funds from the provincial governments.