China will introduce a series of preferential policies to ensure that the country's total investment into water conservancy development reaches at least 800 billion yuan ($119 billion) this year, said Wei Shanzhong, vice-minister of water resources.

According to the ministry, the country's total investment into such projects stood at 802.8 billion yuan in 2021, up 4.2 percent from the previous year.

"The investment demand is huge as the country endeavors to comprehensively enhance the construction of water conservancy infrastructure," Wei said.

"While increasing government investment, more reform measures must be rolled out to address the demand."

He said the ministry has taken a series of measures to broaden the financing channels and make the market play a bigger role in enlarging the investment.

The ministry, for example, has launched pilot programs on real estate investment trusts, or REITs, he said. Support and guidance will be offered to local water resources authorities and water conservancy enterprises to try using the trusts on income-producing water supply, irrigation and hydropower projects.

As an important approach to realizing real-estate securitization, REITs collect investors' funds and hand them over to professional investment institutions for real-estate investment management.

Under its business model, a REIT leases space and collects rents on the properties, then distributes that income as dividends to shareholders.

With experiences gained from pilot programs on public-private partnership, Wei said, the ministry has introduced preferential policies for the funding models to encourage more investment from the private sector into the construction of water conservancy projects.

He also highlighted intensified support from financial institutes.

The ministry has held a conference themed on ramping up financial support with the People's Bank of China, the country's central bank, he said.

It has also jointly issued guidelines on the issue with China Development Bank and Agricultural Development Bank of China, he added.

"Aside from increasing credit supply for water conservancy development, financial institutes will also be encouraged to extend loan maturity dates, offer lower interest rates and lower the capital contribution requirements for water conservancy projects," he said.

He said entities will be allowed to use their right to collect water consumption fees as loan guarantees and sources to pay back loans.