New World Bank Loan Supports Low-Carbon Transition of Urban Mobility in Yichang, China

WASHINGTON — Yichang City in Hubei Province will shift to a city-wide environmentally cleaner transportation system that will improve travel for residents, lower greenhouse gas emissions, and could serve as a model for cities elsewhere with support from a US$250 million loan approved by the World Bank Board of Executive Directors today.

China’s significant investments in infrastructure have propelled economic growth but also led to a surge in energy consumption and greenhouse gas (GHG) emissions. The transportation sector has the highest emissions growth rate.

The newly approved Low Carbon Transition of Urban Mobility in Yichang (Hubei) program will support the city to enforce cleaner vehicle emission standards and retire older, heavily polluting freight vehicles and buses. It will support compact and dense urban development that prioritizes public transit, walking and cycling, make public transportation more attractive, and improve parking management. The program will also help the city pilot participation of the transport sector in an emissions trading scheme. The program will help Yichang reach its low-carbon goals, while delivering global public goods through carbon emission reductions.

These interventions are expected to result in an increase in the average daily public transport ridership, improve accessibility to jobs within 60 minutes of travel using green modes, and reduce net GHG emissions.

“The Low-Carbon Transition of Urban Mobility in Yichang (Hubei) program is the first World Bank-financed transport operation in China to showcase a comprehensive suite of city-scale decarbonization interventions building on international best practices,” said Mara Warwick, World Bank Country Director for China, Mongolia, and Korea. “It provides a unique opportunity to establish a proof of concept for other cities in China and beyond.”

Program financing over five years is estimated at US$1,114 million, of which US$250 million will be funded through an International Bank for Reconstruction and Development loan from the World Bank and the rest from the Chinese government.

The program is aligned with the World Bank’s Country Partnership Framework (CPF) for China for FY2020 to 2025, particularly in promoting low-carbon transport and reducing air pollution, aiding China in meeting its climate commitments and contributing to global public goods.