The World Bank will provide China a loan of US$200 million in support of the first phase of a Shanghai Urban Environment Program, according to the World Bank Beijing Office.

The program is designed to improve the Shanghai city's environment and enhance the quality of local residents' lives.

As the first in a series of up to three loans to China over the next eight years, the money will be used to support Shanghai's efforts to reform the way that urban services are managed and financed and to implement a long-term program of urban environmental improvements, said Geoffrey Read, project task manager with the World Bank Beijing Office.

The money will also be used to provide facilities for the collection, treatment and disposal of domestic waste water and for solid waste disposal in Shanghai's urban areas, and protecting water resources in the upper reaches of the Huangpu River, Shanghai's main source of drinking water.

As one of China's most important industrial bases and a major economic hub, Shanghai has made substantial progress during the last decade in restructuring its economy and upgrading its environmental infrastructure, but problems remain.

World Bank research showed that some 3 million urban residents live in crowded conditions, with inadequate access to drinking water and sanitation.

Less than 60 percent of waste water and storm water in the city is hygienically intercepted and disposed of.

In addition, the existing sanitary landfill for municipal solid waste disposal has only two year's capacity remaining and the water of the Huangpu River has become increasingly polluted over the past five years, rendering it only marginally acceptable as a source of drinking water.

To assist Shanghai's efforts to address these environmental challenges, the project will be carried out in a three-phased approach.

Phase two of the project will focus on consolidating innovative approaches for financing environmental infrastructure, strengthening government management capacity and addressing pollution and fuel efficiency issues.

The project's third phase will focus on strengthening air and agricultural pollution management, said Geoffrey.

"The project will assist the Shanghai government's efforts to become an international economic and trade center with the highest standards of urban environmental quality -- which will both enhance citizens' life quality and help Shanghai to continue to attract high-quality foreign investment."

(Xinhua News Agency June 21, 2003)