The ADB Board of Directors approved the loan for the Anhui Integrated Transport Sector Improvement Project. The $1.35 billion project includes building of a new 139 kilometre-long expressway in the province's neglected northern region, upgrading 452 kilometers of existing roads, improving village bus services, and strengthened capacity in the province's transport departments.

Anhui is a landlocked province in central PRC that lies across the basins of the Yangtze River and the Huaihe River. Despite its strategic central location, Anhui lags behind the rest of the country in economic development, with a GDP per capita around one third the level of the national average. There is great regional disparity as well, with most of the wealth concentrated in industrial cities close to the Yangtze River. Sixty one percent of the province's population of 66 million is classified as rural, with poverty incidence climbing to 10.5% in the countryside.

'An underdeveloped transport system is one of the major barriers to development and poverty reduction in Anhui, particularly in the rural areas,' said Xiaohong Yang, Principal Transport Economist in ADB's East Asia Department. 'A well-developed transport network will help the central region capitalize on its strategic location and transform it into a major hub linking PRC's east and west, north and south.'

The proposed project is expected to benefit four million people in 14 counties, six of which are officially designated poverty counties. As a result of the improved transport corridor, two poor counties in the northeast of the province will gain direct access to markets and development opportunities in the more affluent neighbouring Jiangsu Province.

ADB's loan, from its ordinary capital resources, covers almost 15% of the project cost of $1.35 billion. The loan has a 25-year term, including a grace period of five years, with interest determined in accordance with ADB's LIBOR-based lending facility. The remaining cost will be financed through the PRC Ministry for Transport ($119.1 million), Anhui Provincial People's Government ($116.2 million), Anhui Communications Investment Group Co. Ltd ($320.9 million), and cofinancing loans through the Industrial and Commercial Bank of China and Bank of China ($598.8 million). The Anhui Provincial Department of Transport is the executing agency for the project, which is due for completion around the end of 2015.#