World Bank and China Sign Project Agreement on Urumqi District Heating Project

May 27, 2011


Beijing, May 27, 2011 – The World Bank and the municipal government of Urumqi signed the project agreement on the Urumqi District Heating Project in Beijing today. The Bank has committed to continually support sustainable development of China’s less developed Western provinces.

Urumqi, the capital of Xinjiang Uyghur Autonomous Region in northwest China, has been suffering from serious air pollution in winter, with home heating as a major culprit.  The municipality of Urumqi has determined to improve the air quality for its 2.3 million residents. One of the major measures is to close down hundreds of dispersed boilers in urban areas and replace them with an integrated district heating network. The Urumqi District Heating Project is designed to support this effort.

"This project will change the way heating is supplied to citizens in two important districts of Urumqi,” said Klaus Rohland, World Bank’s Country Director for China, at the signing ceremony. “It will reduce air pollution and noise pollution, improve heating services and reduce the energy and carbon intensity of the city.”

The project will finance construction of basic infrastructure to connect residents to district heating services with improved energy efficiency and environmental performance mainly in two districts, Shuimogou, Shayibake and small part of Tianshan District in Urumqi. The loan of US$100 million contributes 30 percent of the total estimated project costs.

This is the second project supported by the Bank in Urumqi. The first project – Urumqi Urban Transport Improvement Project, which was implemented from 2001 to 2007, has largely alleviated traffic congestion in Urumqi and accelerated the pace of urban development, said Li Hongbin, Vice Mayor of the city, at the signing ceremony. “For the new project, with the World Bank’s technical and financial support, we aim to improve energy efficiency and environmental conditions in the city so as to facilitate the sustainable economic and social development,” he said.

The World Bank has been working with Urumqi Municipality for over a decade. In addition to the $100 million loan for its urban transport, the Bank has extended to Urumqi a $1 million technical assistance grant to improve public transportation and over $2 million in support from an ongoing district heating reforms and promote building energy efficiency program supported by the Global Environment Facility (GEF). The Bank is also conducting further research on air pollution with the Urumqi Environment Protection Bureau.

"The Municipality of Urumqi is grateful to the World Bank’s support over the past decade and wishes to further collaborate with the Bank in future, especially in public transport, urban rail and clean energy,” said Vice Mayor Li.   

 “We attach great importance to supporting western provinces and are pleased to support sustainable development of Urumqi,” Rohland said.