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2026-10-11Key Facts: The General Office of the Ministry of Water Resources and the Office of Agricultural Bank of China jointly issued the "Notice on Doing a Good Job in Financial Services for the High-Quality Development of the Water-Saving Industry," providing systematic green financial support for seven major fields. Key provisions: ABC strives to provide an intended credit line of RMB 3000亿 to water-saving and water-supply related fields during the "15th Five-Year Plan" period; the loan term shall not exceed 45年; on the basis of the generally applied capital ratio of 20%, the capital ratio may be further reduced by no more than 5 percentage points; and it explores pledge and mortgage guarantees based on water rights and other rights and interests as well as water efficiency-linked incentive loans. The seven major fields explicitly include development and utilization of unconventional water.
I. Who Is Supported: Full-Coverage of the Water-Saving Industry Across Seven Major Fields
The "Notice" focuses on the development goals and key tasks of China's water-saving industry. The seven major fields receiving key support are:
- Agricultural water-saving and efficiency enhancement — modernization and upgrading of irrigation districts, high-efficiency water-saving irrigation, etc.
- Industrial water-saving and emission reduction — water-saving upgrading of high water-consuming industries, optimization of circulating cooling water systems, advanced treatment and reuse of wastewater, etc.
- Urban water-saving and loss reduction — leakage control of water supply networks, promotion of water-saving fixtures in public institutions and households, etc.
- Development and utilization of unconventional water — Reclaimed Water, Reclaimed Water Reuse, rainwater harvesting, mine water, seawater desalination, etc.
- Water-saving equipment manufacturing enterprises — the manufacturing side of membrane materials, pumps and valves, metering instruments, intelligent control equipment, etc.
- Water-saving service enterprises — service providers such as energy management contracting (EMC) for water conservation, third-party operation and maintenance, and water-saving consulting and diagnosis.
- Water-saving in major strategic regions — key water-saving projects in national strategic regions such as the Beijing-Tianjin-Hebei region and the Yellow River Basin.
The significance of this list lies in the fact that it covers all industries and all aspects of the water-saving industry, from equipment manufacturing to end-user services, and from agricultural production to industrial reuse. For the Reclaimed Water Reuse industry, the fact that "development and utilization of unconventional water" is listed as a separate field means that Reclaimed Water projects are no longer an appendage of industrial water-saving or urban water-saving, but have become a formal track with independent financing support.
II. How Support Is Provided: A Clause-by-Clause Breakdown of the Seven Measures
1. Credit Line: An Intended Credit Line of RMB 3000亿
Agricultural Bank of China strives to provide an intended credit line support of RMB 3000亿 to water-saving and water-supply related fields during the "15th Five-Year Plan" period. This is the largest commitment in this "Notice," providing an aggregate guarantee for the funding supply of water-saving projects.
2. Loan Term: No More Than 45年
Where conditions are met, the loan term shall be no more than 45年. This clause is highly targeted at the water utility industry — the investment payback period for infrastructure such as Reclaimed Water plants and pipe networks is generally 15 to 30年, and traditionally shorter loan terms would subject projects to excessively high principal and interest pressure in the early stage of operation. The term ceiling of 45年 covers almost the entire cycle of the vast majority of BOT and BOOT concession projects.
3. Loan Interest Rate: Differentiated Pricing
For qualifying water-saving projects and enterprises, a differentiated pricing policy may be granted to help reduce the financing costs of the water-saving industry.
4. Capital Ratio: Can Be Reduced to as Low as 15%
On the basis of the generally applied 20%, for qualifying projects the ratio may be further reduced by no more than 5 percentage points, meaning the lower limit of the capital ratio can reach 15%. For private capital parties, this means a substantial reduction in the occupation of their own funds; the same amount of capital can leverage more projects, making this the most direct clause for improving a project's internal rate of return (IRR).
5. Integrated Financial Services
Give play to the advantages of group-based services, broaden financing channels for water-saving projects, and ensure the implementation of supporting financing and cross-border integrated financial services, etc.
6. Service Model Innovation: Water Rights Pledges and Water Efficiency-Linked Loans
This clause is the most institutionally innovative: exploring innovative pledge and mortgage guarantees based on water rights and other rights and interests as well as water efficiency-linked incentive loan models.
- Water Rights Pledge and Mortgage — Turning the water rights legally obtained by enterprises and surplus water use indicators into pledgeable assets, opening up financing channels for water-saving service enterprises that lack traditional collateral.
- Water Efficiency-Linked Incentive Loans — Loan interest rates are tied to actual water-saving results. The better the water-saving effect, the lower the financing cost, forming a positive incentive loop.
7. Customer Service: Inclusion in the Core Customer List
Eligible customers will be prioritized for management under the core customer and major project list, enjoying differentiated policies in areas such as customer access, customer rating, credit limit, and repayment plan, and benefiting from a priority or fast-track loan approval mechanism.
III. Supporting Mechanisms: Full-Process, Full-Cycle Tracking
In addition to the above seven measures, the Ministry of Water Resources and Agricultural Bank of China will also establish a routine liaison and consultation working mechanism, provide comprehensive financial services across the full process and full cycle, enhance the financial sustainability of water-saving projects, and strengthen risk warning information sharing, jointly promoting the high-quality development of the water-saving industry. This arrangement extends inter-departmental collaboration from a "one-time document issuance" to normalized project coordination and shared risk management.
IV. Why Now: Policy Background and Industry Pain Points
The water-saving industry has long faced a structural awkwardness: project returns are real but not attractive. The water savings and emission reductions of a reclaimed water reuse project can be precisely calculated, but it involves a relatively large investment scale, a long payback period, and weak initial cash flow, and large capital investment often becomes a practical obstacle to project implementation. Traditional credit, under such a cash flow structure, offers cautious tenors and relatively high pricing, which in turn reduces project feasibility.
The three core provisions of the Notice directly target this pain point: extending tenors addresses the mismatch in repayment rhythm, lowering the capital ratio addresses the pressure of large capital contributions, and differentiated pricing addresses high financing costs. Together, these three are enough to make some industrial reclaimed water reuse projects that were previously stuck at the financial calculation stage feasible again.
V. TIANYI TECH's View
TIANYI TECH believes that the most noteworthy item for customers in this policy is "pledge and mortgage guarantees for rights such as water rights." It transforms surplus water rights and water use indicators from book resources into financing-eligible assets. For small and medium-sized water-saving service enterprises lacking traditional collateral such as factory buildings and land, this is a substantive improvement in financing conditions and will also lower the expansion threshold of the contract-based water-saving management model.
There are two specific recommendations for industrial customers: first, complete water rights confirmation and third-party verification of water-saving results as early as possible, as this is a prerequisite for enjoying water efficiency-linked loans and water rights pledges in the future; second, recalculate the IRR of projects in hand — under the new financing conditions of 15% capital ratio + 45年 tenor, reclaimed water reuse retrofit plans previously rejected due to payback period deserve reassessment. The policy window has already opened, and the real difference lies in who prepares the compliance materials and metering system first.
About TIANYI LIMITED
TIANYI LIMITED focuses on the fields of wastewater treatment, reclaimed water reuse, and water resource recycling, providing one-stop services from process consulting, solution design, equipment integration, engineering implementation, to smart operation and maintenance. The company is committed to promoting wastewater resource recovery through technological innovation, helping industrial enterprises and municipal customers achieve multiple goals including water conservation and carbon reduction, compliant discharge, and sustainable development.
Source: Ministry of Water Resources website; CCTV Finance "Water-Saving Industry Gains Financial Support, Ministry of Water Resources Issues Document Supporting Seven Major Areas" (2026-10-01); reposted by Hithink RoyalFlush Finance
