Washington, March 31, 2022: The World Bank's Executive Board today approved a $380 million loan to China to help it cope with water shortages and ecosystem degradation along the Yellow River basin. The loan will complement more than $1.1 billion in government funds to help improve water use efficiency, water pollution control and ecosystem management in the Yellow River Basin. The new project will support key global public goods, such as biodiversity conservation and climate change mitigation, while also strengthening the institutional foundation for integrated water resources planning and ecosystem protection.

Stretching from the arid and semi-arid region of northern China to the Bohai Sea, the Yellow River basin spans nine provinces and regions, covering an area of 752,443 square kilometers. It is home to about 420 million people (about 30% of the country's total population) and contributes 26% of China's GDP (2018 data). The Yellow River provides an important ecological corridor in a more arid landscape, and the watershed contains biodiversity hotspots of global importance, provides important winter breeding and stopover for migratory birds, and is home to more than 150 threatened species.

The Yellow River basin, with its fragile ecosystem and water shortage, has been listed as a national ecological protection priority. The World Bank loan for the Yellow River Basin Ecological Conservation and Restoration and Environmental Pollution Control Demonstration Project will support the Yellow River Basin Plan promulgated by the Chinese Government in October 2021 and contribute to the realization of the core objectives of the national plan for ecological and environmental protection and water resource conservation.

"This project takes the World Bank's long-standing collaboration with China on water management and ecosystem protection in the Yellow River Basin to a new and innovative level," said Rui Ze, World Bank Country Director for China, Mongolia and the Republic of Korea. By better estimating water availability and developing integrated management plans within sustainable water consumption limits, the project will help China reconcile trade-offs between scarce natural resources and achieve its vision of high-quality development in the Yellow River Basin."

It is expected that 75% of the total project investment will be provided by the government, mainly at the provincial level, to support the achievement of the target results. Project activities at the basin level will be implemented by the Yellow River Conservancy Commission of the Ministry of Water Resources under the overall coordination and guidance of the Regional Economic Department of the National Development and Reform Commission. Project activities at the provincial level will support ecological conservation, water-use efficiency improvement and water pollution control in Henan and Shaanxi provinces, both of which are located in the middle reaches of the Yellow River and face prominent problems of soil erosion, ecosystem degradation and water scarcity.