The World Bank is providing a US$320 million loan for the China Tongbai power project to help improve energy efficiency and capacity in Zhejiang. The loan from the bank's International Bank for Reconstruction and Development arm, will mature in 20 years time, although Beijing will be given a five-year grace period. In return, Beijing will pay a 0.75 per cent commitment fee, and a 1 per cent service charge. 'The project will have a marked impact on the economic development of the province and, to a lesser extent, the East China region by mitigating and eliminating institutional and technical constraints that have prevented the power system from expanding and operating efficiently,' the bank said. 'It will also improve the operating and investment efficiency in generation by developing and implementing a competitive generation market in Zhejiang province.' The deal comes as, with the help of World Bank loans worth $90 million, the energy efficiency of Hunan has also been improved, through work on a navigation and electricity project on the Xiangiang River. The loan has helped fund four hydro-power generators with a total capacity of 600 million kWh per year and smoothing the river to make it easier to navigate.