The Asian Development Bank (ADB) announced Tuesday that it had approved a loan of $250 million to a Chinese firm for a wastewater and sludge treatment project.

The assistance has been awarded to CT Environmental Group, which is a leader in the treatment of wastewater and sludge generated by small and medium-sized enterprises (SMEs) in China, according to an ADB statement.

"The project will support China as it strives to dramatically reduce water pollution, including through PPPs (public-private partnerships), as outlined in the State Council-issued Water Pollution Prevention and Control Action Plan," said Hisaka Kimura, East Asia Unit Head of ADB private sector operations department.

The loan will be used by CT Environmental Group to build and operate a series of specialized treatment plants. The areas will be determined by local governments, according to the ADB.

Treated wastewater, which meets national environmental standards, will either be discharged, or sent back to industrial customers to be reused. The goal is to build the capacity to treat 450,000 tons of wastewater and 4,200 tons of sludge per day by 2019, said the ADB.

The ADB assistance includes a $100 million equivalent ordinary loan and a $150 million equivalent complementary loan in US dollars and yuan, funded by commercial banks, with ADB acting as the lender of record.