(Yicai) June 4 -- China's finance ministry has released a list of the first 15 cities to receive financial support as part of the country's new urban infrastructure renewal policy.

Shanghai, Chongqing, Wuhan, and 12 other cities will each receive CNY800 million to CNY1.2 billion (USD110.5 million to USD165.7 million) in grants, the ministry said on May 31. 

The funds will go to renewing and renovating underground pipe networks, building model areas for city-wide sewage pipe networks, shoring up weak links in municipal infrastructure, and renewing and renovating old districts, it noted.

The ministry unveiled the urban infrastructure renewal policy on April 30, which it co-developed with the Ministry of Housing and Urban-Rural Development. The policy aims to revitalize urban areas and promote sustainable development as part of a broader strategy to create livable, green, resilient, and smart cities.

“50 cities will be selected in three batches within three years to receive the subsidies,” a source close to the housing ministry told Yicai. “The first and second batches include 15 cities, while the third will have 20 cities.”

The finance ministry previously joined hands with the housing and other ministries to fund selected cities to build sponge cities, achieving positive results, the person noted, adding that more project types will receive funding under the new policy.

According to the finance ministry’s requirements, the governments of the selected cities must be financially capable of investing in the construction of urban renewal projects, have a low debt risk, and must not run up new hidden debt as a result of the projects, Yicai found.

The finance ministry did not say how much money local governments and private investors need to contribute to the projects to be eligible for the subsidies. Based on the documents submitted by the applicant cities, the central government grants are expected to attract local authority and private funding that is about eight to 10 times bigger, the source said.

Editors: Tang Shihua, Martin Kadiev