Water Financing Program Conference in Viet Nam
Meeting Report
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ADB organized an in-country conference in Viet Nam to build upon the outcomes of the 2006 Water Financing Program Conference and continue the discussion on possible opportunities for ADB to expand its support to the government's financing needs in the sector. These are the results.
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EVENT DETAILS
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| Date
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22-23 March 2007 |
| Venue
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Hanoi, Viet Nam |
| Contact |
Mai Flor |
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Related Materials
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In September 2006, ADB held a conference to jumpstart ADB’s Water Financing Program, which aims to increase water investments in the Asia-Pacific region. Senior government officials from India, Indonesia, Pakistan, the Philippines, and Viet Nam worked with ADB water operations staff to discuss barriers facing their water sectors and opportunities for investments. Viet Nam, in particular, needs $5 billion for water projects, but the country's self-imposed borrowing cap stunts increased investments.
During the conference, Vietnamese officials became interested in ADB’s new financing services. Serious talks began ADB financing for Viet Nam’s outlined priority investment opportunities. The delegates requested a follow-up conference to:
- confirm the Government's water financing needs for the potential projects identified by the Government delegation at the September conference
- discuss the specific requirements for rural, urban, and basin water in terms of investments, reform, and capacity development
The in-country conference on 22-23 March 2007 in Hanoi was attended by 70 delegates headed by senior officials from
- Ministry of Planning and Investment (MPI)
- Ministry of Agriculture and Rural Development (MARD)
- Ministry of Construction (MOC)
- Ministry of Natural Resources and Environment (MONRE)
The one-and-a-half day conference included plenary sessions and detailed discussions in the break out sessions on each water stream (rural, urban and basin). Plenary sessions provided overviews of the Government's priorities and confirmed of investment needs as well as discussion of ADB’s new financing products.
A greater proportion of the Conference was devoted to the break out sessions to allow for detailed discussions between ADB and Government representatives, including those from the provinces. Delegates presented their specific needs and proposed projects, and sought funding through both lending and non-lending products.
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HIGHLIGHTS: PICTURE OF FINANCING DEMANDS
Summary of the rural, urban, and basin water breakout sessions as follows:
- Three project preparation technical assistance for urban water projects for Hanoi, Ho Chi Minh City, and Hue have been included in the ADB program during the February 2007 Country Program Confirmation Mission
- Reform of the urban water supply and sanitation, aimed at establishing water as a business, is continuing with the passage in 2007 of two decrees on urban water supply and on urban wastewater management that promote private sector participation, and sustainability through full cost recovery in water supply and cost recovery in sanitation
- Policy dialogue on sanitation, an emerging sector in Viet Nam on institutional development and financing, needs to be strengthened
- Interest and “appetite” of the municipalities and of concerned government agencies to work with ADB in urban water supply and sanitation have been increasing, initially using OCR loans and guarantees and moving in to sub sovereign and local currency financing
- A large number of water projects have potential. Eight have been identified, including Danang and Haiphong as well as some provinces with a potential OCR investment requirement in 2008–2010 of over $800 million
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A. Ministry of Planning and Investment
MPI confirmed that the financing requirement in the water sector is huge and the Government is keen to explore what financing packages ADB can offer and what additional resources it can help mobilize from other donors. The Government is looking forward to a scenario where big cities can become self reliant with direct access to financing, enabling central Government to focus on re-lending funds to provinces and poor cities.
MPI agreed to undertake the following activities after the conference:
- prepare a water sector roadmap during the on-going water sector review that ADB is also supporting with co-financing from Australia, Denmark, the Netherlands and the World Bank
- in collaboration with relevant sector agencies, nitiate consultations with cities and provinces not present during the conference to identify their financing needs
- request sector agencies to submit detailed concept papers that include financing structures for proposed projects, i.e., financing from donors, government counterpart and community contributions
- prepare concept papers in tandem with ADB (April)
- convene meeting to finalize list of investment projects and technical assistance sought (April)
- work with ADB to incorporate new water projects and technical assistance into ADB pipeline during the CPM in May 2007
B. Asian Development Bank
ADB agreed to undertake the following activities after the conference:
- send an ADB Mission to the South East Asian Water Utilities Network (SEAWUN) Leadership Water Sector Forum in April to
- present new Decrees on Urban Water Supply and Sanitation to participating cities and water companies
- meet with MPI, MOC, SBV, and Ministry of Finance to prioritize the 2007-2010 urban water supply and sanitation program; including project selection criteria, addressing the cost recovery mechanisms, and required level of private sector participation
- mobilize technical assistance fact-finding missions to Hanoi, Ho Chi Minh City, and Hue, and other municipalities identified in consultation with the Government.
- assist MARD in testing approaches to addressing sanitation in small towns and hard-to-reach communities through the Pilot and Demonstration Activity (PDA) facility of the Cooperation Fund for the Water Sector within the next three months
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