Agricultural Bank of China to provide $45b in credit to water sector

The Agricultural Bank of China plans to make up to 300 billion yuan ($44.7 billion) in credit support to the water conservation and water supply sectors during the 15th Five-Year Plan period (2026-30). 

The Ministry of Water Resources disclosed the figure in a media release on Wednesday, after it issued a notification on enhancing financing services for the high-quality development of the water conservation industry with the bank. 

The notification also includes a series of other measures that aim to support the high-quality development of the water conservation industry, with a focus on agricultural water efficiency, industrial water conservation and emission reduction, urban water-loss reduction, unconventional water utilization, and water-saving equipment and service companies.

Under the notification, eligible projects may receive loans with terms of up to 45 years, the release noted. The bank will also apply differentiated interest rates to qualified water-saving projects and enterprises to help reduce their financing costs.

For eligible projects, the release said, borrowers may only need to put up 15 percent of the project cost themselves, compared with the usual 20 percent.

It said the bank will explore innovative financing models, including loans secured by water-use rights and other rights-related assets, as well as incentive-based lending linked to water-use efficiency.

The ministry and the Agricultural Bank of China will establish a regular consultation mechanism to provide full-process and full-cycle financial services, improve information sharing on risk warnings and strengthen the financial sustainability of water conservation projects, according to the release.

houliqiang@chinadaily.com.cn