Altay is the northernmost area in Xinjiang Uygur Autonomous Region (XUAR), northwest of the People’s Republic of China, close to Central Asia. The area suffers from a very harsh climate, with subzero temperatures between October and March, annual precipitation of about 180 millimeters, and a high evaporation rate of about 2,000 millimeters. At project appraisal, its infrastructure facilities were inadequate to meet demand and hindered the development of local economies. Road surfaces were severely damaged by winter freezing and traffic; utilities were either nonexistent or old, fragile, and mostly technically insufficient; water supply capacity was restricted by inadequate infrastructure and water quality was compromised by high seasonal turbidity; most counties lacked sewers and wastewater treatment capacity;  and district central heating had limited coverage.

To help address the situation, the Asian Development Bank (ADB) approved a loan of $100 million for the Xinjiang Altay Urban Infrastructure and Environment Improvement Project in June 2011. The project aimed to improve living standards and conditions in five counties by providing integrated and more efficient municipal services. The outcome, as agreed at appraisal, was built on 26 components under seven main outputs to provide essential road, water supply, wastewater and solid waste management, and centralized heating infrastructure.

At completion, the project delivered six of its seven intended main outputs: (i) construction and/or upgrading of 39.9 kilometers (km) of roads of varying widths and capacities, including lighting, signage, and traffic controls; (ii) construction and/or upgrading of water supply infrastructure, including improved raw water abstraction, three new water supply plants, and 129.6 km of water pipes; (iii) improved wastewater treatment and disposal, including six new wastewater treatment plants  (WWTPs) and 60.3 km of collector and trunk sewers; (iv) improved solid waste management, including five new landfills with garbage collection and transfer facilities; (v) a centralized heating supply, including two new central heating plants, 14 heating exchange stations, and 25.5 km of heating pipes; and (vi) the implementation of capacity building programs to improve local capacity in project management, the utilization of project facilities, and the commissioning of equipment.  The seventh planned output, related to an originally envisaged economic development zone in one county and a forest scenic area in another country, was cancelled due to government non-approval of the economic development zone and the reclassification to non-commercial purposes of the target forest area.  Underpinning the government decisions were the refinement of the urban development plan and upgrading of national standards, which could not have been foreseen at appraisal.

With much of the infrastructure constructed the first of their kind in their respective counties, the project fully achieved or exceeded its target for 18 of the 19 updated outcome indicators. It remarkably exceeded its targets by a large margin in access to potable water supply, wastewater treatment, and solid waste collection for the urban population. Beyond the expected outcome and outputs, the project has been generating extra ecological benefits by establishing windbreak and sand-stabilizing forests using treated effluent from WWTPs as irrigating water.  This ecological bonus has amplified project contributions to improving the environment in Altay through, inter alia, better road conditions and shorter travel times that reduced emissions and improved air quality; wastewater treatment that reduced the discharge of pollutants into water bodies, improved solid waste collection and disposal systems that cleaned up urban areas, and improved heating that further reduced carbon emissions.  On average, 90% of urban residents in the project counties benefited from the project, which also contributed to the economic and social development of the area through employment creation, business opportunities, tourism development, and improved investment environment.

The project had the Altay Prefecture Government as executing agency.  The government of each county was the implementing agency for the project components undertaken within its jurisdiction.