The Asian Development Bank (ADB) has approved a CNY1.068 billion ($150 million) loan to pilot its first nature credit mechanism in Gulin County, Sichuan Province, People’s Republic of China. The financing will support biodiversity conservation and green development in the Chishui River Basin, a key freshwater biodiversity hotspot. The initiative, known as the Chishui River Basin Ecological Protection and Green Development Project, will implement a results-based eco-compensation system and a nature credit mechanism supported by digital monitoring and blockchain technologies.
The project aims to promote biodiversity conservation, restore forests and wetlands, conserve soil, upgrade rural–urban environmental infrastructure, and adopt a landscape approach to integrated catchment management. By transforming natural capital—including biodiversity, carbon, and ecosystem services—into virtual assets, the project will mobilize public and private green financing. It is expected to directly benefit approximately 265,000 residents, half of whom are women, through restored ecosystems, improved living conditions, and expanded livelihood opportunities.
ADB Country Director for the PRC, Asif Cheema, highlighted that the project pioneers a nature-positive financing model that integrates biodiversity conservation, resilience to extreme weather events, and economic development. The initiative aligns with ADB’s Operational Approach for Food Systems Transformation (2026–2030), Environment Action Plan (2024–2030), and the country partnership strategy for China, creating long-term incentives for communities, enterprises, and governments to protect and restore ecosystems while supporting food security and sustainable development.
The Chishui River Basin, the last undammed primary tributary of the Yangtze River, hosts 112 globally significant fish species, including 28 endemic species. From 2022 to 2024, provincial governments removed 342 small hydropower dams and 300 barrages and weirs. Despite these efforts, the basin faces growing environmental pressures, including soil erosion, pollution from pesticides, deforestation, habitat degradation, and increased disaster risks such as floods, droughts, and extreme temperatures. Gulin County, located in a mountainous ecological barrier zone, is particularly vulnerable due to rapid urbanization on floodplains.
The project will strengthen national and local green financing policies by improving natural capital accounting, establishing new protected areas, and enhancing coordination on disaster resilience. Additionally, it will promote low-emissions agriculture, develop ecotourism facilities, and support green micro, small, and medium-sized enterprises to provide sustainable income for local communities.
The initiative supports China’s ecological civilization goals, aligns with the Kunming–Montreal Global Biodiversity Framework, and contributes to ADB’s Strategy 2030 priorities, including climate action, resilience, and environmental sustainability. ADB, established in 1966 and owned by 69 members, remains committed to fostering inclusive, resilient, and sustainable growth across Asia and the Pacific through innovative financial tools and strategic partnerships.
