Inner Mongolia borrows $150M for energy efficiency

ADB will extend a $150 million loan to help the Inner Mongolia improve its aging coal-fired heating systems.

Along with closing down old heating systems and installing clean burning, cost-effective boilers, it will also construct transmission and distribution pipelines and other related infrastructure as well as build natural gas pipelines and other equipment to provide clean energy to Keyouqian, one ofthe Region’s poorest ‘banners’, or administrative areas.

The loan for phase II of the Inner Mongolia Autonomous Region Environment Improvement Project was approved by Asian Development Bank's Board of Directors.

The Inner Mongolia Autonomous Region has about 25 percent of PRC’s total coal reserves that it taps both for its own needs and to generate electricity for export to other areas. However, its district heating systems, many of which were installed in the 1970s, have become unreliable,costly and major contributors of harmful air pollutants, including sulfur dioxide and nitrogen oxides, which cause acid rain.

The second phase of the project will install more energy efficient and cleaner heating supply systems in municipalities that missed out on the initialwork, with over 786,000 urban residents expected to eventually benefit from improved district heating. Coal consumption will be avoided by 1.59 million tons annually as a result of work carried out under both phases, energy efficiency in the district heating sector will rise by over 15 percent,and nearly 2.3 million people will indirectly benefit from improved air quality.

The executing agency is the Government of Inner Mongolia Autonomous Region, with the project expected to be completed by December 2014.