WB loan to reduce vulnerability of southern Shaanxi to floods

The World Bank’s Board of Executive Directors approved a loan of US$100 million to China Tuesday to foster regional collaboration, reduce flood risk and improve urban services in selected towns in the southern part of Shaanxi Province. 

This is one of the 14 remaining poorest mountainous areas that has been prioritized in the country’s poverty reduction program. The project will be co-financed by a loan of US$50 million from the German Development Bank.

In southern Shaanxi region, 42 percent of the population lives in cities and towns along the Han River—the largest tributary of the Yangtze River—that are increasingly affected by flood events. Climate change is expected to cause parts of Shaanxi to become high-risk flood areas, further increasing the region’s vulnerability.

These urban areas are the backbone of economic activity in the region and contributed to two-thirds of its total GDP in 2015. From 1997 to 2016, floods in the region affected 32.8 million people and caused damages estimated in the billions of US dollars. Post-disaster assessments suggest that better coordination among towns along the Han River basin could have lessened the impacts or the severity of weather-related disasters. 

The Shaanxi Sustainable Towns Development Project will help establish a platform to enable collaboration among towns to coordinate and improve decision-making on regional socio-economic development issues such as flood control, climate change adaptation and urban regeneration. 

“The project will help integrate resilience, climate adaptation and urban regeneration into local development planning and financing. It will bring about a shift from treating adaptation as an incremental cost and isolated investment to systematically managing and incorporating climate risks and opportunities throughout development planning,” said Martin Raiser, World Bank Country Director for China. 

The project will also build or upgrade critical infrastructure in project towns and establish a regional flood risk management system and a water pollution monitoring system. In addition, investments will be made to regenerate dilapidated urban areas in the towns using a people-oriented approach to cultivate a connected and inviting urban core. 

The project will directly benefit more than half a million people in six towns in Shaanxi who will be better protected from flood disasters. The project will also contribute to carbon mitigation through introducing an urban development model that controls urban sprawl and car-oriented development.