OREANDA-NEWS. May 08, 2014. The Development Financing Special Loan Agreement to Support Shantytown Reconstruction in Henan was signed between the CDB and the Government of Henan Province during a signing ceremony held in Zhengzhou.

The CDB Henan branch will grant a special loan of RMB 45.8bn to Henan Yuzi Urban and Rural Investment Development Co., Ltd. to support shantytown reconstruction at various locations in the province. The ceremony was attended by Xie Fuzhan, governor of Henan Province, and CDB president, Mr. Zheng Zhijie.

It is learned that the special CDB loan of RMB 45.8bn will be used for the reconstruction of 50 shantytowns measuring 21.43mn square meters in 39 counties and districts of 16 provincial cities in Henan including Zhengzhou and Nanyang, benefitting a total of over 100,000 local households. This long-term and low-cost loan is supplemented with bridge loans to ensure project capital replenishment and will, therefore, step up the shantytown reconstruction process in Henan.

As part of an effort to transform dilapidated housing in urban areas and improve the housing conditions of low-income households, the Henan Government issued the Opinions to Step Up Shantytown Reconstruction in January 2014, prioritizing shantytown reconstruction as a core component of affordable housing in urban areas, stressing that another 1.66mn shantytown households will be renovated between 2014 and 2017 on the back of successful relocation of 120,000 shantytown households in 2013. Such efforts will improve housing conditions of the local residents significantly, as well as continuously developing infrastructure and public service facilities.

Initiated by the Henan Government and the CDB Head Office, relevant Henan departments determined jointly with the Henan CDB branch that Henan Yuzi Urban and Rural Investment Development Co., Ltd. applies for a shantytown reconstruction loan with the CDB as the provincial borrowing platform, and that the loan would be granted and repaid in a uniform fashion. Henan thus became one of the first provinces in China to adopt uniform loan receipt and repayment via a provincial platform, and such an approach is dubbed the “Henan model” for shantytown reconstruction. As of 20 April 2014, the CDB had pledged RMB 89.3bn worth of loans for shantytown reconstruction projects in Henan, of which RMB 15.5bn had been granted, accounting for over 80% of total loans in the province, benefitting 170,000 shantytown households in nearly 50 Henan cities and counties.

The RMB 45.8bn special loan agreement will lay a solid foundation for the CDB to accelerate the shantytown reconstruction process in Henan by granting loans on an increased scale. It is reported that the CDB has provided Henan Province with shantytown reconstruction special loans exceeding RMB 7bn, making it the largest lending bank in the country in this respect. According to the current shantytown reconstruction progress, it is projected that the CDB will grant a total of more than RMB 20bn worth of special loans to Henan Province in full-year 2014.