ADB’s US$212 mil loan for safe water project

The Asian Development Bank (ADB) will provide US$212 million to continue a project improving water service delivery to more than three million Vietnamese people.

94,000 households in six cities and provinces will receive piped water for the first time.

“Clean water is crucial to development,” said Amy Leung, ADB Southeast Asia Department’s Urban and Water Division Director. “The government recognises that access to clean water can support local economic development and improve the quality of life and health of people.”

The funding is the second tranche of a US$1 billion loan framework approved in 2011, designed to deliver an estimated 500,000 poor households their first-ever piped water connection. Vietnam achieved 92 percent overall coverage for urban water supply in 2006—albeit with uneven service levels—but over the next 10 years, more than 15 million people will receive improved water service under ADB financing.

This tranche of the financing will fund water supply infrastructure in Binh Duong Province, Dak Lak Province, Da Nang City, Hai Phong City, Thua Thien-Hue Province, and Quang Tri Province. Water supply companies will undertake subprojects, which include the construction of water production plants, pumping stations, and transmission and distribution pipelines. Under the second tranche, nine water companies will borrow to prepare an investment project for financing under a subsequent tranche.

Two Vietnamese Government decrees transformed water services from a social to an economic commodity in recognition of the role clean water plays in the country’s economic advancement. The progressive water legislation, supported by ADB, requires water supply companies to operate on full cost recovery and to reduce non-revenue water—which is lost to leaks and other inefficiencies—from 2010’s 30 percent to 15 percent by 2025.

Source: ADB