DNP Water look forward to IFC’s continued support for private invesments in Viet Nam water sector

On 13 August 2019, as part of an official visit to Vietnam, Mr. Philippe Le Houérou – CEO of International Finance Corporation (IFC) – a member of the World Bank Group, along with IFC’s high-level delegates, visit Nhi Thanh Water Treatment Plant, a completed project of DNP Water.

Vietnam is presently among the countries with acute shortage of water. Statistics of International Water Resources Association (IWRA) shows that the domestic water source of the country is below global average level, at 3,840 m3/day/year, which is 400 m3/day/year lower than the global average. Vietnam’s Ministry of Natural Resources and Environment also forecasts that by 2025, the average water volume per capita in Vietnam is only half of the above-mentioned number, which is a paradox for a country blessed with abundant natural rivers and lakes.

According to the latest updates from the Ministry of Health, 17.2 million people (equivalent to 21.5% the population) are currently using untested and untreated underground water for daily activities. Last year, there were up to 9,000 deaths from using unhygienic water, nearly 250 people hospitalized due to acute diarrhea infected from polluted water and almost 200 thousand people suffered from cancer annually. Demand for clean water is getting even more pressing, in the context of fast-paced economic growth, industrialization, urbanization and the improved living standards. However, at present only 84% urban population and 39% rural population have access to clean water.

In the face of grave water pollution, deteriorating water quality and severe shortage of clean water to maintain daily activities of millions of people, development of centralized surface water treatment plants instead of exploiting the depleting sub-standard underground water became top priority and main concern of the Government.

According to the estimates of the World Bank, Vietnam needs to invest up to USD 1 billion annually by 2020 for the urban clean water supply to meet the current and future needs. Given the increasing demand, yet the State’s budget for infrastructure in the water sector is still limited, and State-owned enterprises do not have sufficient resources to develop new projects, public – private partnership (PPP) and privatization is the key solution to the problem. New policies to encourage private investments in the water sector have been adopted from central Government to local authorities, in parallel with divestments of State-ownership from provincial water supply companies.

To expedite private investments in the water sector in Vietnam and support Vietnamese Government to solve the urgent needs of clean water for the people, high-level delegates of IFC visited Nhi Thanh Water Plant – one of the largest privately-funded water treatment and supply projects in the Mekong Delta. After visiting the plant, discussing with DNP Water – the first private water company in Vietnam benefiting from IFC’s financial aid, and meeting local beneficiaries of the clean water provided by Nhi Thanh water plant, Mr. Philippe Le Houérou conveyed that this visit was the “heart” of his trip to Vietnam.

In the meeting with IFC, DNP Water’s senior leader shares their vision and development strategy in investing in the water sector. DNP Water looks forward to IFC’s continued support in corporate governance, finance and technology, and also in advocating for Vietnamese Government’s further policy reforms in the water sector. Through this support, the company will be able to realize its vision of becoming No.1 developer, owner and operator of water supply assets, pioneering in the application of advanced technology in production and distribution of clean water, ensuring that 100% residents in its operational areas have access to safe clean water and enhance the living standards of Vietnamese people.

In particular, DNP Water expects that World Bank and IFC continue their advocacy for policy reforms in the water sector, including national targets, legal framework, clean water law, comprehensive action plan, incentives provision, resource allocation and privatization, etc. in line with the national targets.

In the long run, DNP Water hopes that IFC would broaden its financial product offerings at preferential rates for private companies to enable the expedited construction of water plants in rural and suburban areas as well as waste water treatment in the future.

At the end of the visit, IFC’s CEO applauds the results from IFC’s collaboration with DNP and expresses willingness to continue supporting DNP to solve the critical water problem in Vietnam.

Nhi Thanh Water Plant (Long An), commenced operation in 20 April 2019, is one of the biggest newly constructed plants in the Mekong Delta, directly contributing to the reduction of underground water usage that causes severe subsidence in the area. This is a pivotal clean water supply project in Long An province with the total supply capacity of up to 80,000 m3/day and total investment of VND653 billion.

IFC is the largest global developmental institution supporting the private sector in emerging economies, working with over 2,000 private companies worldwide on development opportunities in challenging areas.

DNP Water – a member of DNP Corp – signed an agreement with IFC on 28 December 2017 and became the first Vietnam private company in the water sector to receive investment of IFC. The total investment amounted to USD24.9 million to support the development strategy of DNP Water of investing in clean water plants in provinces/cities across Vietnam.