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Taiyuan, one of the most polluted cities in China, has received a 940 million-yuan (113 million US dollars) Japanese government loan to promote clean production at the Taiyuan Iron & Steel Group, the single biggest polluter of the city.

Preparations for the project, including designing and international procurement were already under way, according to company sources. the project may begin as early as late this year.

The completion of the project was expected to cut the steel producer's discharges of various pollutants to 11.1 percent from 59.9 percent last year, the sources said.

Taiyuan was once regarded as one of the most polluted cities in the world due to its coal mining, steel and other heavy industries.

Thanks to increased spending on pollution control, the city was removed from the list of world's dirtiest cities last year.

In the last two years, the Taiyuan Iron & Steel Group alone spent 620 million yuan (74.7 million US dollars) on pollution control, the sources said.