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Three Gorges receives financing

China’s Three Gorges project has received a 4B yuan (US$483.6M) loan from a domestic bank for its second phase of development. The loan, provided by a branch of the China Construction Bank, brings the total planned investment this year to 11B yuan, up 2B yuan from 1998. The necessary funds are assured for the second phase of the project (1998-2003), according to Lu Yumei, chairman of the Yangtze Three Gorges Project Development Corporation (TGPDC), which is charged with building the hydroelectric project.

The second phase, from 1998-2003, will cost about 80B yuan, 65% of which comes from the Three Gorges Fund, the Gezhouba Power Plant and the State Development Bank, while the rest has to be raised through borrowing commercial loans, acquiring export credits and issuing bonds.

Lu said the second phase of the project was still short of 25B yuan (US$3.1B) out of a total budget of 80B yuan. From 2003 the dam is supposed to become self-financing through its production of electricity. The whole project is due to be completed six years later when the dam’s 26 turbines will come into service. The authorities hope to earn back their investment by 2012.

The total cost of the dam is estimated at 200B yuan (US$27B), and a total of 38B yuan has been invested since 1993.