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WFP Countries
People’s Republic of China (PRC):
Private Sector Investment is Key1

Few countries are more directly impacted by water issues than the PRC. Despite having the world's fourth-largest fresh water reserves, the PRC is likely to face severe water challenges over the coming years.

But with the country opening up its economy to ADB’s new Water Financing Program (WFP) and private sector financing, these challenges can be easily surmounted.
 
CONTENTS
Read about WFP countries’ investment barriers, opportunities, and emerging projects.
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India
Indonesia
Pakistan
People’s Republic of China
Philippines
Viet Nam

WATER INVESTMENT BARRIERS
 
  The Yellow River, infamous for great floods, is slowly dying because of pollution and excessive use.

PRC’s water issues include severe water pollution, urban and rural water supply, and the intense demand for water from booming industries, farms, and sprawling cities. These water sector challenges can only be addressed through a coherent and integrated national water policy, a change in behavior, and a greater understanding of the challenges the country faces. The PRC Government also sees the private sector as playing an integral role.

“There are a lot of areas that could be further improved to increase investment,” says Amy Leung, an Urban Development Specialist in ADB’s East Asia Department. She notes, however, that it will be difficult given the cap on lending to the PRC at $1.5 billion; of that about 41% is for transport, 25.3% for agriculture and natural resources, 22.5% for social infrastructure, and 11.3% for energy. There is no lending cap, however, where projects involve private sector participation.

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INVESTMENT OPPORTUNITIES

In PRC’s water sector, ADB has focused on improving the urban environment, public health, and quality of life for urban residents through improving wastewater management and supply of potable water, construction and rehabilitation of sewer networks, and strengthening water resource management.

There is also an increasing emphasis on the policy and management tools needed for better water resources management. “The legal framework and governance are areas where we can work with the Government to improve,” Leung says. There is a lot of work to be done as the water utilities move from complete central Government control to more independent financial and operational management.

For example, the recently completed and ADB-financed Suzhou Creek Rehabilitation Project to clean up the Suzhou Creek was important and a big success. The once murky and severely polluted river, which passes through Shanghai, has been transformed into an ecological wonder.

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EMERGING PROJECTS

A second phase of a project to improve the handling of wastewater in Wuhan, capital of Hebei Province, was approved this year with a $100 million loan. Wuhan is home to almost 8 million people and is a center of communications, education, culture, commerce, trade, transportation, and industry.

The project will construct new and upgrade existing wastewater treatment facilities, extend and rehabilitate collection networks, and add larger-capacity storm water pumping stations, among others. The city aims to treat 80% of its wastewater by 2010.

A third project, in Fuzhou, the capital of Fujian Province, will improve wastewater treatment through the construction and rehabilitation of sewer networks, rehabilitation of the system of inland creeks, and the strengthening of urban governance in water resource management.


1 This article is part of a series contributed by ADB Consultant Writer Eric Van Zant.