China: An Inland Waterway Project Brings Multiple Benefits

September 29, 2015


World Bank Group

With the World Bank’s financial and technical support, Jiangxi Province in southeast China has improved the navigation capacity of the Gan River in its middle and lower reaches and enhanced flood protection for local people and communities through construction of the Shihutang Navigation and Hydropower Complex. The renewable electricity generated helps meet rapidly growing demand for energy in the region and reduce carbon emissions that contribute to global warming.

Challenge

China’s inland waterway transport network is the world’s largest in terms of length and freight volume, with traffic having grown at 9 percent annually to 1.16 billion tons in the period of 2001–2006. The country had about 37,000 kilometers of Grade VI-VII inland waterways that were capable of reliably carrying only small barges. However, only a small fraction of the potential capacity of these waterways was used. Navigation infrastructure either had deficiencies or was of a low standard, due to low level of investments.

Jiangxi Province is an economically underdeveloped land-locked province in southeast China.  Transport became one of the priorities in its development strategy. But the growth of inland waterway transport in the province lagged far behind the growth of road transport. The province decided to pursue a more balanced transport strategy that gives more prominence to inland waterway transport, particularly by improving navigation capacity of the Gan River which is the largest and longest river flowing across the province from south to north into the Yangtze River.

Solution

The Jiangxi Shihutang Navigation and Hydropower Complex Project was designed to improve utilization of the Gan River for more reliable freight transport and for cleaner energy production through: (a) improving inland waterway transport capacity and service levels for primary and secondary industries in the Nanchang-Ganzhou corridor of Gan River; and (b) generating renewable electricity to help meet rapidly growing demand for energy in the region. It also sought to significantly improved flood protection for people and communities vulnerable to floods in the project area. The project consists of three components: construction of Shihutang Complex, flood protection works, and technical assistance. 

Results

Implemented from 2009 to 2014, the project achieved the following major results through construction of the Shihutang Navigation and Hydropower Complex and other activities:

  • 38 kilometers of inland waterway in the middle reaches of the Gan River was upgraded from Grade V to Grade III, which substantially increased the navigable time for 1000-ton vessels from 27 percent to 95 percent of the time. The improved capacity and service level at Shihutang makes inland waterway transport a competitive mode for bulk and low-value cargo along the Gan River.
  • 284 GWh of hydroelectric power was generated in 2013, which was 220,000 ton reduction of carbon emission. An emission reduction purchase agreement was signed between the project entity and the World Bank acting on behalf of the Spanish Carbon Fund. Estimated hydroelectric power generation for 2014 was 400 GWh. The generated electricity has been networked with the regional power grid to meet the rapidly growing demand for energy and alleviate the power shortage in the region. Annual hydropower generation is expected to increase five percent each year between 2016 and 2020 to reach the targeted annual capacity of 472.4 GWh.
  • Flood protection works constructed under the project, including dikes, diversion canals, pumping stations, and drainage sluices, significantly improved 10-year flood protection for the communities in the project area and nearly 4,400 hectares of farmland.
  • The dam crest road has shortened travel distance between Wanhe Town and Taihe County by about 12 kilometers, directly benefiting about 50,000 pedestrians and vehicle users.
  • Training was provided to local government officials and staff, for a total of 678 person times, to increase their knowledge of project management, inland waterway transport development, hydropower complex operation, dam safety and other related topics.

" Thanks to the flood protection works, the flood control standards and capacity have been significantly enhanced. About 56,000 mu of land and 47,765 people are protected from floods.  "

Chen Wenbo

Deputy Town Chief, Yanxi Township

Bank Group Contribution

The World Bank provided an IBRD loan of US$100 million, about 29.1 percent of the total project cost of US$344.05 million. The Bank was the leading international financial institution in China’s inland waterway transport sub-sector and had supported five projects in six provinces over the previous decade. Its unique expertise and experience, both international and local, contributed to project design and implementation, as well as to the building of institutional capacity in the inland waterway transport sub-sector in Jiangxi Province.

Partners

Both the Central Government and Jiangxi Provincial Government made strong commitment to the project, contributing US$76.10 million (22.1 percent of the total project cost) and US$84.92 million (24.7 percent of the total project cost) respectively.  The rest of the financing came from commercial bank loans.

Moving Forward

The completed Shihutang Complex is operated and maintained by the Jiangxi Port Investment Company. A complete set of monitoring equipment has been installed, and a professional institute has been assigned to conduct routine dam safety monitoring. It is expected reach an annual average amount of 472.4 GWh in the next few years. The power generation provides reliable and stable revenue to cover the expense for normal operation and maintenance of the Complex. Furthermore, the revenue from hydropower generation allows the free usage of ship lock.

Beneficiaries

The beneficiaries of the project included people and businesses engaged in inland waterway transport, farming communities in the vicinity of project area, local residents who took advantage of the associated employment opportunities, enhanced flood protection, and the project implementation agencies. Reduction of travel distance between Wanhe Town and Taihe County by 12 km would directly benefit about 50,000 people.

Chen Wenbo, Deputy Town Chief, Yanxi Township:

Thanks to the flood protection works, the flood control standards and capacity have been significantly enhanced. About 56,000 mu of land and 47,765 people are protected from floods. (The project) has turned the formerly-flooded area into good farmland with stable yields, improved farming conditions and reduced the losses caused by floods. It provided local communities with good production and living conditions, with integrated environmental, economic and social benefits.

Kang Mingzhen, Captain, Taihe County Shipping Company:

With 38 kilometers of waterways upgraded by the project, the water levels and flows are more stable. It has made it much easier to navigate, improved our work conditions, and reduced labor intensity. 

Image
38 kilometers
of inland waterway in the middle reaches of the Gan River was upgraded from Grade V to Grade III.