The Yunnan province of China has been granted a 5bn-yuan ($786m) loan by the China Development Bank to finance construction of three secondary roads in Lijiang city and the Diqing Tibetan Autonomous Prefecture.

Under the deal, the bank will extend a 700m-yuan ($110m) loan to fund the construction of the road between Ninglang in Lijiang and the Lugu Lake.

About 2.33bn yuan ($366m) is allocated for the road connecting Weixi County to Deqen County in Diqing, while the remaining loan will be towards the development of road linking Shangrila County to Deqen.

The road projects are expected to improve the traffic services on the Yunnan-Tibet Highway as well as the infrastructure on the roads between the Lugu Lake and Shangrila touted to have good potential for the tourism industry.

The Yunnan branch of the Beijing-based China Development Bank is Yunnan’s largest road investment lending bank.

Recently, various highway construction projects in the Hunan, Yunnan and Shaanxi provinces were suspended after banks tightened lending to road contractors.