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IFC provides loan for clean water

Released at: 17:15, 09/01/2018

IFC provides loan for clean water

Illustrative image (Source: tinmoitruong.vn)

$15.3 million convertible loan to DNP Water JSC to increase access to and availability of clean water around Vietnam.

by Linh San

The International Finance Corporation (IFC) has committed a convertible loan of $15.3 million to the DNP Water JSC, a private Vietnamese company, to increase access to and availability of clean water for urban households and residents in the country.

The IFC’s investment will support the growth of DNP Water by funding the construction of new bulk water treatment plants and the acquisition of equitized water supply companies. This will help improve access to clean water in mainly second- and third-tier cities in Vietnam.

“With access to affordable and clean water a key development target, IFC’s investment will help encourage private sector participation in the growing equitized water sector in Vietnam,” said Mr. Kyle Kelhofer, IFC Senior Country Manager for Vietnam, Cambodia and Laos. “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.”

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 1 million cu m per day by 2025.

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 Mr. Vu Dinh Do, Chairman of DNP Water. “IFC’s extensive water sector expertise will further help us bring international best practices to Vietnam’s water sector and improve our sustainability standards.”

Only about 35 per cent of the Vietnamese population is currently connected to piped water. According to World Bank estimates, the country needs investment of $1 billion per year to 2020 for urban water supply to meet current and future growth demands. While the government is aware of the challenge, it faces fiscal constraints and has called for increased private funding for clean water and piped-water coverage expansion.

The IFC has extensive experience supporting private sector investments in water and waste water worldwide, making 55 investments totaling $2.2 billion, including mobilization, over the last ten years.

A sister organization of the World Bank and a member of the World Bank Group, the IFC is the largest global development institution focused on the private sector in emerging markets. In FY17, it delivered a record $19.3 billion in long-term financing to developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity.

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