The Board of Directors approved a $100 million loan for the Wuhan Urban Environmental Improvement Project. It will involve the treatment and disposal of sewage sludge, and the rehabilitation of polluted lakes and water channels, benefiting up to 3 million urban residents in the municipality.

Wuhan, the capital of Hubei Province with a population of nearly 9 million people, is successfully treating most of its wastewater through the support of previous ADB assistance. However, the huge amount of sewage sludge generated by the treatment plants - estimated at 657 tons a day - poses growing environmental and health hazards.

The project will incorporate a number of innovative and integrated measures designed to improve the environment and support the government for a more sustainable urban development master plan.

The project will introduce a decentralized approach by building small on-site sludge units integrated with the city master plan. Sludge from Wuhan's wastewater plants will be dried and treated using biogas from an ADB-financed wastewater facility and steam from a thermal power plant. In addition, the dried sludge will be used as a soil conditioner and filler for building construction materials, supporting the PRC's push to create sustainable local economies that reduce, reuse and recycle waste. The project will advocate for beneficiary sludge treatment and utilization.

“This is the first ADB-assisted project to pursue comprehensive sludge management while addressing environmental issues such as developing 'circular economies' and mitigating climate change,” said Arnaud Heckmann, Urban Development Specialist, in ADB's East Asia Department. He added that it will help establish Wuhan as a model for sustainable development in the PRC.

The project will also help restore Wuhan's polluted lakes and water channels. Sediment dredging and slope protection work will be carried out, while flood control gates and a water pumping station will also be built. A storm water treatment system will be established for Yangchun Lake, artificial wetlands will be created, and lakes will be planted with aquatic plants.

“The measures will help to restore the natural hydraulic circulation between lakes and channels and increase water regeneration and flood retention capacities that will help mitigate climate change impacts, while allowing urban expansion in flood-safe and environmentally clean areas,” said Mr. Heckmann.

Wuhan's lakes and rivers, which make up 25% of its urban area, have become seriously polluted by agricultural activity and urban construction, with just 38 of 100 lakes in the mid-20th century still in existence.

An environmental public awareness campaign targeted at lakeside businesses, communities and schoolchildren will be carried out, while training and other support will be given for wastewater and sludge treatment operation and maintenance.

ADB's assistance makes up nearly 20% of the total project cost of about $501.8 million. The loan from ADB's Ordinary Capital Resources has a 25-year term, including a 5-year grace period, with interest determined in accordance with ADB's LIBOR facility. The Wuhan Municipal Government is providing counterpart funds equivalent to $125.4 million, while the Agricultural Bank of China is supplying a 10-year loan of $276.3 million. The municipal government is the executing agency for the project which is expected to be completed by December 2014.