Ground breaking ceremony. Photo: VOI
Vietnam-Oman Investment continues its strategic investment with a clean water plant in the capital.
A breaking ground ceremony for the construction of the Duong River Surface Water Treatment Project was held on March 9 in Phu Dong commune, Gia Lam district, Hanoi.
The Vietnam-Oman Investment (VOI) project was licensed by the Hanoi People’s Committee just nine months ago. With total capital of $225 million in Phase I, the project has 62 ha of land for a water treatment plant and 76 km of pipeline. It has a huge job ahead of it in site clearance and further investment preparations.
The project getting underway is further evidence of Hanoi’s commitment to attracting and creating the best conditions possible for investors in the capital. Addressing the ceremony, Mr. Nguyen Duc Chung, Chairman of the Hanoi People’s Committee, asked that construction be shortened from 22 months to 19 months to meet demand among Hanoi residents for a stable and clean water supply.
Mr. Hinai (left) and Mr. Nguyen Duc Chung. Photo: VOI
The city’s demand for clean water will reach 1.5 million cu m per day by 2020 while existing supply can only provide 900,000 cu m, resulting in a shortage of about 600,000 cu m. Most current water supply relies on underground water that is not clean, while surface water supply is limited and unstable. The VOI project aims to meet the clean water needs of about 3 million people in 168 communes in eight districts of Hanoi as well as Bac Ninh and Hung Yen provinces by 2020. Clean water supply is to reach 150,000 cu m per day by 2018 and 300,000 cu m per day by 2020.
The project is another high-profile investment by VOI in its water portfolio in Vietnam. VOI is a known authority in infrastructure investment in the country, being established in 2008 as a joint venture between two sovereign wealth funds of Oman and Vietnam: the State Government Reserve Fund (SGRF) of Oman and the State Capital Investment Corporation (SCIC) of Vietnam. Capitalized on support from the governments of Vietnam and Oman, VOI has shown a strong long-term commitment in value investments in reputable infrastructure projects and companies, including power plants, toll roads, water suppliers, and ports and logistics providers, etc. In water, VOI has one existing project in the Mekong Delta one in Ho Chi Minh City.
Risk appetite wise, VOI is one of only a few private equity firms in Vietnam embarking on green-field or brown-field projects because of its local understanding and long-term commitment to realizing the potential of such projects. “We are very proud to have VOI as a joint founding partner,” said Ms. Do Thi Kim Lien, Chairwoman of the Duong River Surface Water JSC. “Unlike other private equity firms, VOI has a deep understanding of the water industry and has been enthusiastic in joining us, even in the pre-feasibility study stage. Their deep experience with water projects in Vietnam has helped us a lot, especially in risk management and corporate governance during this greenfield stage.”
Beyond being just another foreign financial investor, VOI positions itself as an active and responsible partner in investee companies with value adding in not just technical but also institutional matters. Mr. Le Quoc Binh, CEO of the Ho Chi Minh City Infrastructure Investment JSC (CII), a major infrastructure consortium in the south of the country, said: “VOI has a major interest in socioeconomic development in Vietnam and has helped us a great deal in corporate governance at both the group and subsidiary level at CII. If every private equity firm in Vietnam had a similar commitment and long-term vision, it would definitely bring many benefits to Vietnam’s socioeconomic development.”
Representing the Omani Ministry of Finance at the breaking ground ceremony, Mr. Abdul Malik Abdullah Zahir Al Hinai, said: “We are happy with VOI’s performance so far in Vietnam’s development and security. I see that VOI has made an active contribution to the Vietnamese Government in resolving the urgent need among Vietnamese people for clean water. Such projects are evidence of the fruitful cooperation between the two governments for better quality of life for people in both nations.” As a symbol of the strong economic ties between Vietnam and Oman, VOI hopes to cash in on areas that tap the critical needs of more than 90 million people and mark Vietnam as a highlight in its investment portfolio.