The Asian Development Bank (ADB) is to provide $300 million to improve wastewater infrastructure in rural areas across China.

The development bank has entered into a facility agreement with water and wastewater treatment solutions provider Sound Global Ltd. to improve rural wastewater management through the use of innovative technologies.

"By building and operating wastewater treatment plants with small modular automatic rapid technologies, smart solutions can be provided for small communities in rural areas which currently do not have wastewater treatment infrastructure," explained Hisaka Kimura, head of Private Sector Infrastructure Finance at ADB's East Asia Unit.

Rural areas are home to half of China's population, and the huge volume of wastewater generated in these areas poses an environmental threat to the country's rivers, lakes and underground aquifers. According to the ADB, wastewater treatment facilities and sewage pipelines are scarce beyond China's major city areas. Less than 20 percent of wastewater generated by rural areas is treated.

Much of the untreated wastewater flows directly back into the local surface water, impacting the quality of local water sources. This has a great sanitation impact on downstream residents who depend on these local water sources for their water supply, the ADB noted.

With the new financing, Sound Global aims to treat 240,000 tons of wastewater per day in 100 townships by 2017.

The agreement covers a $100 million facility and a syndicated loan of $200 million.