HONG KONG, Feb. 1, 2013 /PRNewswire/ -- The Asian Development Bank ("ADB") today signed a US$100 million B-Loan Facility agreement with China Water Affairs Group Limited ("CWA") (stock code: 00855.HK). The proceeds from the loan will be used to improve water supply in second and third-tier cities in the People's Republic of China ("PRC").
The two-phase financing cooperation between ADB and CWA involves the provision of a total of US$200 million loan by ADB to CWA. It is part of ADB's efforts to support private sector's participation in water distribution for boosting water treatment capacity and enhancing water efficiency in the PRC. ADB provided a US$100 million direct loan (A-Loan) to CWA in July 2011. This US$100 million B-Loan Facility is another part of their financing cooperation. The Royal Bank of Scotland plc is the lead manager of this syndication loan, while ADB acts as the lender of record for participating commercial banks.
CWA will use the proceeds from ADB's loans to acquire, upgrade, expand and operate water networks in small and medium-sized cities of the PRC. It aims to increase water treatment capacity and improve water efficiency of second and third-tier cities in the PRC, with about 5 million customers are expected to benefit from such move.
The PRC's urban population has more than tripled in the past three decades as the urbanization process in the country is gaining momentum. Many small and medium-sized cities have to speed up the development of water supply facilities to boost water treatment capacity in order to meet their rising demand for water. Meanwhile, widespread waste and inefficiencies of water supply services are commonplace, as reflected in poor metering and leaky pipes. There is a pressing need to improve water supply facilities.