A Japanese bank has granted southwest China's Yunnan Province a loan of 23.1 billion Japanese yen (US$210 million) to help treat pollution in Dianchi Lake, the largest freshwater lake on the Yunnan-Guizhou Plateau.

The loan from the Japan Bank for International Cooperation will be used to treat the north bank of the 300-square-kilometer lake, about seven kilometers southwest of Kunming, the provincial capital, said Mr Yu, an official with the Dianchi Administration Bureau.

The loan will mainly be used to improve waste water drainage works and enhance the capacities of Kunming waste water treatment plants, according to Yu.

The lake became polluted in the late 1970s as urbanization gained pace in the area. Since the 1990s, pollution has got worse, tarnishing the beauty of the lake.

The project will cost about 3.87 billion yuan (US$480 million). It will start next March and be completed in 2012.

The provincial and Kunming city governments will also continue to invest in the project, said Yu.

The government of Kunming has already invested more than one billion yuan (US$125 million) to treat the lake.