ADB approves loan for hydroelectric project in China

The 98-megawatt Xiaogushan hydro-project, together with substation and transmission lines, would represent about 38 percent of the capacity of the Zhangye city grid when completed in 2007, the Manila-based ADB said in a statement.

The city of 1.25 million people suffers from frequent power cuts due to insufficient capacity, mostly from coal-fired plants, it added.

"The heavy dependence on coal for energy has resulted in substantial air and environmental pollution, which disproportionately affects the poor," said ADB project economist Piya Abeygunawardena.

About 40 percent of the total cost of the project will be financed by the ADB.