Ex-ante Evaluation
1. Name of the ProjectCountry: The People’s Republic of China
Project: Anhui Municipal Solid Waste Treatment Project(Loan Agreement: December 21, 2007; Loan Amount: 6,800 million yen; Borrower: TheGovernment of the People’s Republic of China)
2. Necessity and Relevance of JBIC’s AssistanceAccompanying economic growth and urbanization in China, municipal solid waste has increased.
However, since the rate of harmless treatment of municipal solid waste1 is low at 51.7% (2005),
there is concern over the deterioration of water resources and public health. Given this situation, thegovernment of China is promoting reduction of solid waste in its 11th Five-Year Plan and has
decided to boost the rate of harmless treatment of municipal solid waste to more than 60% by 2010.
In Anhui Province (population: 65 million), there are currently 5 sanitary landfills and 7 new sanitary
landfills are under construction. However, Anhui Province has one of the lowest rates of harmlesstreatment of municipal solid waste in China, at 17.6% (2005). The local cities targeted by this project
possess only simple landfills that do not meet national standards. The amount of municipal solid
waste is increasing concurrent with rapid economic development, and there is concern about theimpact of seepage of polluted water on the soil and the impact of pollution in rivers and groundwater
as well as air pollution on health and the natural environment. Thus, the building of sanitary landfills
is an urgent issue.
Given this situation, the 11th Five-Year Plan for Environmental Protection in Anhui Province
mandates a rate of harmless treatment of municipal solid waste of 60% or more by 2010 as anenvironmental protection index. The plan’s main undertaking is to construct waste treatment sites in31 local cities.
This project addresses environmental conservation, one of the priority areas designated in theEconomic Cooperation Program for China prepared by the government of Japan and JBIC’s
Medium-Term Strategy for Overseas Economic Cooperation Operations. Thus, JBIC’s support forthis project is highly necessary and relevant.
3. Project Objectives
The project aims to promote appropriate treatment of solid waste in local cities of Anhui Province bydeveloping solid waste treatment systems and thereby aims to contribute to improvement ofresidents’ living environment and sanitation environment and to environmental conservation in thatregion.
4. Project Description(1) Target Area
9 local cities in Anhui Province(2) Project Outline

1The percentage of solid waste that undergoes harmless treatment out of the total amount of solid waste collected. In China, “harmlesstreatment” refers to sanitary landfill, composting, and incineration.

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The project involves procurement of materials and equipment, civil works, and training related toconstruction of municipal solid waste treatment facilities in 9 local cities in Anhui Province.
(a) Municipal solid waste treatment facilities: Sanitary landfill, pre-treatment facilities forincineration at cement plants, garbage collection and transfer, etc.
(b) Training: Training in Japan concerning solid waste treatment (basic policy, sanitary landfill,incineration technologies, garbage collection and transfer, information management,environmental monitoring, etc.)(3) Total Project Cost / Loan Amount
15,897 million yen (Yen Loan Amount: 6,800 million yen)
(4) ScheduleJanuary 2008–September 2012 (57 months). Project completion is defined as the end of warranty
period.
(5) Implementation Structure(a) Borrower: The Government of the People’s Republic of China(b) Executing Agency: Anhui Provincial People’s Government(c) Operation and Maintenance System: Environment Protection Bureau, state-owned
companies, etc.
(6) Environmental and Social Consideration(a) Environmental Effects / Land Acquisition and Resident Relocation(i) Category：B(ii) Reason for Categorization
This project is classified as Category B according to the “Japan Bank for International
Cooperation Guidelines for Confirmation of Environmental and Social Considerations”(dated April 2002), as this project does not correspond to sector or regions described in thesaid guidelines as being sensitive to negative impact, and as it is not deemed to have asignificant harmful impact on the environment.
(iii) Environmental Permit
The Environmental Impact Assessment (EIA) report related to the project will be approvedby the Environmental Protection Bureau of Anhui Province in February 2008.
(iv) Anti-Pollution Measures
At the sanitary landfills, no particular negative impact is anticipated because offensive odors
will be prevented by covering the site with earth and seeping water will be properly collected
and treated. Moreover, the planned levels of emission into the atmosphere (of SO2, NO2, HCl,and particulate matter, etc.) due to incineration at cement plants will be within the domestic
environmental standards of China.
2The amount of annual reduction in gas emission (reduction of greenhouse gases) varies depending on the number of years elapsed
since the waste was buried in the landfill. Here, for the sake of expedience, the simple average of the annual reduction was calculated bydividing the total reduction amount at the landfills concerned by the number of years of emission.

-2-(v) Natural Environment
The project site is not located in or around sensitive areas, such as national parks, and soadverse impact on the natural environment is assumed to be minimal.
(vi) Social Environment
The project involves land acquisition of about 145 ha, and acquisition will be carried out inaccordance with the domestic procedures of China. The project does not involve residentrelocation.
(vii) Other/Monitoring
The Environmental Protection Bureau of each local city will monitor the quality of thegroundwater and the air, etc., surrounding the final disposal sites.
(b) Promotion of Poverty Reduction
There are measures for reducing payment of solid waste treatment fees for the poor. Thesemeasures will be applied to the project as well.
(c) Promotion of Social Development (e.g. Gender Perspective, Measure for Infectious Diseases
including AIDS, Participatory Development, Consideration for the Handicapped, etc.)
It is expected that safety and sanitation education, etc., will be provided for area residents whocollect garbage at the final disposal sites.
(7) Other Important Issues
With the completion of the project, reduction in CO2 emission equivalent to approximately 530,000
tons/year can be expected.2
5. Outcome Targets(1) Evaluation Indicators (Operation and Effect Indicator)
TargetBaselineIndicator(2014, 2 years after(2005 actual)completion)
Amount of waste disposed at sanitary landfills (tons/year)
0792,000
Amount of waste incinerated (tons/year)
0198,000
BOD concentration of seeping water after treatment (mg/l)–
30–600
COD concentration of seeping water after treatment (mg/l)–100–1,000(2) Number of BeneficiariesApproximately 2.9 million(3) Internal Rate of Return (Financial Internal Rate of Return)
In solid waste treatment projects, assistance from the government budget is necessary, and thereby
the financial internal rate of return (FIRR) is not calculated. Each year, the necessary amount, asdetermined by the budget office of each local city, is financed.
6. External Risk Factors
・ Delays in construction due to site changes caused by changes in road maintenance areas,development areas, etc. in urban planning.

-3-・ Impact on operation and maintenance due to limitation of domestic funds or shortages incollected fees due to changes in the policies relating to the fee sharing principle.
7. Lessons Learned from Findings of Similar Projects Undertaken in the Past
From the ex-post evaluation of the Beijing Sewage Treatment Plant Construction Project, it has beenlearned that it is important to set an appropriate fee system that considers operation and maintenancecosts, investment costs, payment ability of beneficil residents, and financial ability of local
governments in order to ensure the sustainability of the project’s effects. Based on this lesson,
establishment of appropriate fee system and technical standards will be confirmed through interim
monitoring and supervision, etc.
8. Plans for Future Evaluation(1) Indicators for Future Evaluation(a) Amount of waste disposed at sanitary landfills (tons/year)(b) Amount of waste incinerated (tons/year)(c) BOD concentration of seeping water after treatment (mg/l)(d) COD concentration of seeping water after treatment (mg/l)(2) Timing of Future Evaluation
2 years after project completion-4-