The Multilateral Investment Guarantee Agency (MIGA), a World Bank Group member, said today it has issued US$34.2 million in guarantee coverage for three infrastructure projects in China. The guarantees are insuring investments in China's urban solid waste treatment and water supply sectors against noncommercial risks.

With rapid economic and urban development in China, solid waste treatment in large cities has become an increasingly important issue. The MIGA-supported projects break new ground when it comes to handling solid waste in an environmentally sensitive way, while simultaneously capitalizing on the power generation potential of garbage.

One of the projects involves a US$27.7 million investment by Golden State Waste Management Corporation in the restructuring and expansion of a solid waste treatment and power generation facility in Bejing's Chaoyang District. The facility will have the capacity to treat 1,600 tonnes of solid waste a day and to generate 225 million kilowatt hours per year from the incinerator's waste heat. With an estimated total investment of US$106.5 million, the project is expected to become the largest waste incineration and power generation plant in China, using residual heat and steam to generate electrical power.

MIGA has also provided a US$6.93 million guarantee to Golden State Waste Management (Beijing) Corporation for a comprehensive solid waste treatment and transfer center in Beijing's Fengtai District. The facility will include a garbage screening system to sort renewable resources, which it plans to sell or send to renewable resource markets. Remaining garbage will be used as compost and for other purposes.

"Managing scarce resources and environmental challenges is a key focus of the World Bank Group in China," says Yukiko Omura, executive vice president of MIGA. "These projects are particularly exciting because they are conserving Beijing's limited landfill capacity while introducing advanced waste treatment technology and generating electricity. We expect these projects to serve as a powerful model for other investments locally and nationally."

Over the next five years, China has an estimated need for more than US$128.2 billion in investment in the areas of water supply, wastewater treatment, and solid waste treatment. Many areas and cities face a serious shortage of potable water. To address China's vast needs and to benefit from the state-of-the-art technology, the Chinese government is encouraging local governments to attract both public and private domestic, as well as foreign investment to support water supply and wastewater treatment projects.

MIGA has issued a third guarantee of US$2.33 million to Golden State Water Group Corporation for the restructuring and expansion of an existing water supply project in Zhenjiang, Jiangsu Province of China. The improvements include building a new water reserve tank, upgrading the plant's automation system, strengthening water quality examination techniques, and streamlining operational resources. The investor will also construct a new active carbon filtration pool to improve water quality.

"The improved water plant is expected to provide better service and higher quality water," says Omura. "It will also lay the groundwork for the company to construct phase two of the project, which will double the amount of water supplied."

(China Development Gateway July 10, 2007)