ADB Loans $212 Million to Bring Piped Water to 3 Million in Viet Nam

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide $212 million to continue a project to improve water services delivery to more than three million people, including 94,000 households that will receive piped water for the first time in six cities and provinces of Viet Nam.

“Clean water is crucial to development,” said Amy Leung, Director Urban and Water Division in ADB’s Southeast Asia department. “The government recognizes that access to clean water can support local economic development and improve the quality of life and health of people.”

The funding is the second tranche of a $1 billion loan framework approved in 2011, designed to benefit an estimated 500,000 poor households will receive their first-ever piped water connection. In 2006, Viet Nam reached 92% overall coverage for urban water supply with an uneven level of service, but over the next 10 years, more than 15 million people will receive improved water service under ADB financing.

This tranche of the financing will provide water supply infrastructure in Binh Duong Province, Dak Lak Province, Da Nang City, Hai Phong City, Thua Thien Hue Province, and Quang Tri Province. Water supply companies will undertake subprojects, which include the construction of water production plants, pumping stations, transmission and distribution pipelines. Under the second tranche, nine water companies will borrow to prepare an investment project for financing under a subsequent tranche.

Two decrees issued by the Vietnamese government transformed water services from a social to an economic commodity in recognition of the role clean water plays in the country’s economic advancement. The progressive water legislation, supported by ADB, requires water supply companies to operate on full cost recovery and to reduce by half non-revenue water, which is lost to leaks and other inefficiencies, from 30% in 2010 to 15% by 2025.