ADB Approves $141M Loan for Climate-Smart Agriculture in Sichuan, China

The initiative aims to promote climate-smart, low-carbon agriculture while enhancing rural resilience, improving livelihoods, and reducing environmental degradation.

The Asian Development Bank (ADB) has approved a loan worth 1 billion Chinese yuan (approximately $140.89 million USD) to support the launch of a groundbreaking agricultural transformation project in Sichuan Province, People’s Republic of China (PRC). The initiative aims to promote climate-smart, low-carbon agriculture while enhancing rural resilience, improving livelihoods, and reducing environmental degradation.

Named the Sichuan Climate-Smart Low-Carbon Agriculture Development Demonstration Program, the project is expected to directly benefit more than 750,000 residents, many of whom rely on agriculture for their livelihoods.

A Model for Sustainable Agriculture Across Asia

According to Asif Cheema, ADB Country Director for the PRC, the project is not only a strategic investment for Sichuan but also a replicable blueprint for other regions facing similar environmental and food security challenges.

“This program is a strategic investment for ADB that will contribute toward a sustainable future for agriculture in the PRC. By establishing a replicable model for low-carbon and climate-smart agriculture, we are building resilience for Sichuan Province and creating a scalable model for other regions and countries,” said Cheema.

Addressing Environmental and Climate Challenges

Sichuan is one of China’s most critical agricultural hubs and a major grain-producing province. However, it faces a multitude of environmental challenges:

• Degraded soil and water quality due to overuse of chemical fertilizers and pesticides

• Intensive land use and extensive terracing, which strain natural resources

• Frequent and intensified extreme weather events, linked to climate change, which disrupt farming cycles and threaten regional food security

These challenges are undermining agricultural productivity, increasing the vulnerability of rural communities, and adding pressure to both local ecosystems and national food systems.

Key Features of the Program

To tackle these issues, the ADB-backed program will deploy a multifaceted strategy, which includes:

1. Modernizing Farming Systems

• Upgrading infrastructure and farm equipment

• Transitioning to low-carbon production technologies

• Promoting sustainable water and land management practices

2. Digital Agricultural Tools

• Integrating digital information platforms to assist farmers with data-driven decisions

• Leveraging tech to monitor environmental impacts and optimize resource use

3. Policy and Institutional Support

• Developing new policies and incentives to encourage green practices

• Testing voluntary carbon trading schemes in agriculture

• Introducing localized emission reduction methodologies in farming systems

4. Chemical Use Reduction

• Promoting the limited and efficient use of fertilizers and pesticides

• Supporting biological alternatives and organic practices

5. Ecosystem Restoration and Irrigation Efficiency

• Rehabilitating degraded farmlands and natural areas

• Replacing outdated irrigation systems with water-efficient technologies

Supporting China’s National Climate Goals

The program aligns closely with China’s climate agenda, particularly its commitments to:

• Peak carbon emissions by 2030

• Achieve carbon neutrality by 2060

By cutting emissions in one of the country’s most resource-intensive sectors, the program will directly contribute to those national and global targets while supporting climate adaptation in rural regions.

Empowering Rural Communities

Beyond environmental benefits, the program will:

• Improve living standards in rural areas

• Build community resilience to climate-related hazards

• Expand employment opportunities in green agriculture

• Strengthen knowledge sharing and local expertise in climate-smart farming

It will also support farmers through training programs, encouraging local innovation and creating sustainable agricultural value chains that can be adopted across China and elsewhere in Asia.

Looking Forward

The Sichuan demonstration is a flagship example of how development finance can be used to catalyze agricultural innovation, environmental protection, and rural development simultaneously. As other provinces and countries face increasing food insecurity, land degradation, and climate volatility, programs like this provide a roadmap for resilient, regenerative farming systems.

The success of this initiative could position Sichuan as a leader in climate-smart agriculture and inspire further international collaboration to transform the global food system.