Currently only about 35 percent of the Vietnamese population is connected to piped water. According to World Bank estimates, the country needs investments worth $1 billion per year to 2020 for urban water supply to meet its current and future growth demands. While the government is aware of this challenge, it faces fiscal constraints and has called for increased private funding for clean water and piped-water coverage expansion.
DNP Water aims to expand its portfolio of mainly urban water treatment and supply facilities in Vietnam, and is planning to increase its treatment and supply capacity by five times to one million cubic meters per day by 2025. IFC’s investment will support the growth of the company by funding the construction of new bulk water treatment plants and the acquisition of privatized water supply companies. This will help improve access to clean water in mainly second- and third-tier cities in Vietnam.
As agreed by all parties, the financing package may increase to $24.9 million to support further growth of the company.
“We greatly appreciate IFC’s long-term funding in an important, but quickly changing sector,” said Vu Dinh Do, DNP Water Chairman. “IFC’s extensive water sector expertise will further help us bring international best practices to the Vietnamese water sector and improve our sustainability standards.”
"With access to affordable and clean water a key development target, IFC's investment will help encourage private-sector participation in this important one and the growing privatized water sector in Vietnam,” said Kyle Kelhofer, IFC Senior Country Manager for Vietnam, Cambodia and Lao PDR. “IFC’s financing of a private company will help reduce the capital investment burden on the government. It will further accelerate the leveraging of the private sector for critical infrastructure, and champion the growth of local entrepreneurs.”
IFC has extensive experience supporting private sector investments in water and waste water worldwide; IFC has made 55 investments totaling $2.2 billion including mobilization over the last 10 years.
