ADB and Henan Tian Lun Partner on $125M Green Loan to Cut Methane in China

The comprehensive funding package includes a $100 million loan directly from ADB, supplemented by a $25 million syndicated complementary loan.

The Asian Development Bank (ADB) has signed a landmark loan package equivalent to $125 million in Chinese yuan with Henan Tian Lun Gas Group Limited to tackle methane leakage from aging gas distribution networks in the People’s Republic of China (PRC). This collaborative initiative marks a significant step toward reducing greenhouse gas emissions and improving energy safety across five provinces.

Upgrading Gas Networks for a Greener Future

The comprehensive funding package includes a $100 million loan directly from ADB, supplemented by a $25 million syndicated complementary loan. The syndicated component is a unique local currency cofinancing product aimed at offering enhanced financial flexibility by diversifying loan tenors and reducing currency risks. Fubon Bank (China) Co., Ltd. (Beijing Branch) and Korea Development Bank (Beijing Branch) have joined the effort, with ADB acting as the Mandated Lead Arranger and Bookrunner.

The financing will support the modernization of 10 city gas distribution networks located across five provinces, targeting critical infrastructure prone to methane leakage. These provinces, which are home to dense urban populations, have seen an upsurge in energy demand, particularly for heating purposes, due to rapid urbanization.

Technology Integration: Smart Meters and Real-Time Monitoring

A key component of the rehabilitation initiative is the large-scale deployment of advanced technologies to bolster gas network efficiency and safety. At least 500,000 households will receive smart gas meters, equipped with remote shut-off capabilities in the event of a leak. Additionally, digital sensors will be embedded along the rehabilitated pipelines to provide real-time monitoring, immediately alerting operators to structural weaknesses or potential breaches.

These innovations are expected to significantly improve service delivery for end-users while establishing a modernized and intelligent gas distribution framework.

Environmental and Climate Impact

Methane is one of the most potent greenhouse gases, with a global warming potential many times greater than carbon dioxide over a 20-year period. The PRC, currently the world’s largest methane emitter, reported that its energy sector accounted for nearly 50% of the country’s methane emissions in 2022.

The planned upgrades are projected to cut greenhouse gas emissions by at least 190,000 tons of carbon dioxide equivalent annually. This contribution is part of broader national and international efforts to mitigate climate change through improved environmental governance and clean energy transitions.

“This initiative, supported by ADB’s green financing, will dramatically reduce methane leakage while enhancing safety and operational resilience in city gas systems,” said Safdar Parvez, ADB Country Director for the PRC. “We are proud to support Henan Tian Lun in modernizing its infrastructure and contributing to the PRC’s low-carbon transition.”

Certification and Alignment with Green Standards

ADB’s loan to Henan Tian Lun is certified as a green loan by the Lianhe Equator Environmental Impact Assessment Company Limited. The project aligns with the Green Industry Guidance Catalogue (2019) and the Green and Low Carbon Transition Industry Guidance Catalogue (2024), reinforcing its environmental integrity and adherence to sustainability principles.

Corporate Commitment to Sustainable Energy

Established in 2004, Henan Tian Lun Gas Group is a prominent city gas provider operating across 67 cities with a sprawling pipeline network exceeding 9,500 kilometers. The company currently serves over 3.83 million households across China.

Xian Zhenyuan, Director and General Manager of Henan Tian Lun, highlighted the organization’s commitment: “Henan Tian Lun is dedicated to ensuring secure, modern, and sustainable energy access for households across the PRC. With ADB’s backing, we are amplifying the social and environmental impacts of our operations and are eager to share insights from our experience in gas safety and energy efficiency with the wider energy community.”

Looking Ahead

This ambitious project underscores a growing recognition of the critical need to invest in sustainable infrastructure in rapidly urbanizing regions. With significant environmental, operational, and social benefits, the partnership between ADB and Henan Tian Lun is a model for future collaborations aimed at achieving both economic and environmental goals. Through strategic investments and technological innovation, the PRC continues to make strides toward a cleaner, safer, and more resilient energy future.