The Asian Development Bank signed a $300-million equivalent loan facility with Beijing Capital Group on Thursday to support wastewater treatment upgrades in the western part of China.

With the support of ADB and Beijing Capital Group, a State-owned environmental service provider, the project will be able to provide reliable and efficient access to water and wastewater treatment in small communities in less-developed regions in China, according to Hisaka Kimura, East Asia unit head of ADB's private sector operations development.

The assistance includes a dual currency dollar-yuan loan equivalent to $150 million from ADB's ordinary resources and a complementary loan of the same amount raised from participating banks, with ADB acting as lender of record.

The $300-million investment would play a key role in implementing the project in regions such as Yunnan, Guizhou and Sichuan provinces, where "local governments may find it hard to get enough financial support for such infrastructure projects due to lack of experience", said Kimura, adding that local governments alone can hardly be expected to fill the financial gap caused by widespread water pollution in rural areas of China.

According to the latest report released by the E20 Policy and Market Research Institute, around 607 million villagers in China produced 10 billion metric tons of sewage water each year, while more than 90 percent of sewage is sent into rivers and lakes without being treated - a far different situation than in urban areas, where 90 percent of sewage is treated.

Feng Tao, chief financial officer of Beijing Capital Group, said the company will improve water treatment facilities by using patented technologies of its subsidiary Capital Greinworth Environmental Protection Co Ltd, which is based in Suzhou, Jiangsu province. Based on specific challenges in different villages, the $300-million loans will be used to build, expand and rehabilitate wastewater facilities.

Liu Yongzheng, general manager of the company, said that the project might take 10 years to finish. "We will discuss and make thorough investigations in villages in western part of China with ADB's experts in the next couple of months in order to identify specific challenges and seek the most appropriate solutions."