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The World Bank has approved an 86.33 million US dollar loan to scale up China's use of renewable energy as the country's demand for power increases, the bank said Wednesday.

The World Bank's Board of Executive Directors approved the follow-up project to the 2005 China Renewable Energy Scale-Up Program Phase 1, which would develop a large wind farm in the China's Inner Mongolia Autonomous Region and rehabilitate and develop selected small hydropower projects in Zhejiang Province, the bank said in a statement.

The bank said the overall renewable energy scale-up program aims to develop the Chinese commercial market for energy suppliers to provide renewable energy to the electricity grid on a large scale in an efficient and cost-effective way. Renewable energy sources like wind power, solar power, and biomass have up to now been produced only in small-scale, pilot programs, outside the main electricity supply.

Noureddine Berrah, lead energy specialist, said, "China's energy demands and its need to decrease air pollution make large-scale renewable energy development an important goal."

"The idea behind the program is to increase the commercial, large-scale use of renewable energy sources like wind, small hydropower, and solar energy so that they contribute to meeting the fast-growing electricity demand from homes, farms, and businesses."

As China's gross domestic product quadrupled from 1980 to 2000,its energy consumption more than doubled to about 1.3 billion tons of coal equivalent.

Projections for energy consumption indicate that fuel consumption could double or almost triple by 2020, even if energy efficiency efforts were increased, the bank said.

The follow-up project to the China Renewable Energy Scale-Up Project (Phase I) provides investment funds to help demonstrate success in large-scale renewable energy development by local renewable energy developers as other local investment funds take time to materialize.

A total of 67 million US dollars of the bank's investment would go to the development of the 100 million watts at Huitengxile Wind Farm in the Inner Mongolia Autonomous Region, which is currently home to approximately 70 million watts of wind generation capacity. An additional 19.33 million US dollars would finance the rehabilitation and development of selected small hydropower projects (not exceeding 10 million watts) in Zhejiang Province.