Paving the way for greater private sector investment in Vietnam’s water supply infrastructure


Context

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.

The Project

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 two water distribution systems (or retail water supply plants) in the semi-rural regions of Vietnam.

The Portfolio’s two water distribution systems aim to provide 24/7, piped and treated water to 16 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.

Our Impact

Impact on people: The portfolio will provide improved water supply service and first time access to reliable piped water supply to thousands of households, including those in areas where there is high dependence on the collection of rainwater for everyday use.

DEVELOPMENT IMPACT
25,000
people with first time access to clean water
27,700
people with improved water supply service
320
short-term jobs
20
long-term jobs
SUSTAINABLE DEVELOPMENT GOAL(S)

Company

Ba Lai: Darco Ba Lai Company Limited
Thuy Nguyen: To be established

Total Project Cost (Phase 1)

Ba Lai: US$ 2.9M
Thuy Nguyen: US$ 5M

Country

Vietnam

Region

Ben Tre Province
Hai Phong Municipality

Timeline

  • Financial Close achieved for the Kim Lien Project in Q1 2019

  • Expected completion of refurbishment and expansion in 2020

  • Financial Close achieved for the Ba Lai Project in Q4 2019, expected start of Operations in 2H 2022

  • Financial Close for Thuy Nguyen expected 2H 2023, expected start of Operations in 2024

Sector

Water

InfraCo Asia Funding Committed

US$ 4M

Other PIDG Funding Committed

US$ 2.7M (VGF Grant)

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