Paving the way for greater private sector investment in Vietnam’s water supply infrastructure
With over 90 million people, Vietnam is the third most populous country in southeast Asia. To meet the growing needs of the population, water supply and sanitation projects in Vietnam require more investment – with only US$1.0bn of the required US$2.7bn invested annually.
According to WHO and UNICEF estimates, 72% of the rural population uses non-piped water, as opposed to 55% of the national population and 20% of the urban population . These figures reflect the broader trend of a widening gap in the provision of water supply and sanitation services, between the rural poor and the urban non-poor.
Both increased effectiveness and more innovative financing are needed to close the gaps in the financing and provision of water supply and sanitation services. Access to private sector finance is currently limited due to low tariffs, which have proven insufficient to cover investment costs and the high volume of non-revenue water.
InfraCo Asia is co-developing a portfolio of water supply projects with Singapore-listed company Darco Water Technologies. Through the Vietnam Water Supply Portfolio, InfraCo Asia aims to increase private sector participation in water supply projects in Vietnam to help meet its water supply and sanitation-related development goals, including universal access to safe drinking water by 2030.
The Vietnam Water Supply Portfolio involves the implementation of one bulk water supply plant and two water distribution systems (or retail water supply plants) in the semi-rural regions of Vietnam.
The Kim Lien Bulk Water Supply project currently provides around 1,000 m3/day of treated water, on a take-or-pay basis, to an existing water distribution company that pipes water directly to households in rural communes. The project’s refurbishment and expansion of the Kim Lien plant is expected to result in an increased capacity of up to 10,000 m3/day of treated water.
The Portfolio’s two water distribution systems aim to provide 24/7, piped and treated water to 13 communes and one industrial area in Ben Tre province, and 9 communes in Hai Phong municipality, where individuals are highly dependent on the collection of rainwater for everyday use. Upon completion of the first phase of development for both water distribution systems, the projects are expected to see a combined increase of 30,000 m3/day of clean water supply, piped directly to rural households and industrial facilities.