Viet Nam : Improving Operational Performance of the Water Supply Sector Project

Sovereign Project | 44002-022

In February 2011, the Asian Development Bank (ADB) approved a $1 billion multitranche financing facility (MFF) to fund operational improvements for urban water supply during 20112020. The MFF provides access to financing to many water companies to help them improve their operations and expand their water supply systems, including intake works, production transmission, and distribution. The facility addresses water as a limiting factor for growth and inclusiveness by expanding water supply services to peri-urban areas, ultimately increasing competitiveness and assisting the transformation of cities and towns to keep pace with rapid urbanization. This capacity development technical assistance (TA) is being processed in parallel with the MFF to help the Government of Viet Nam improve water supply services.

Project Details

  • Project Officer
    Ishii, Satoshi
    Southeast Asia Department
    Request for information
  • Country/Economy
    Viet Nam
  • Modality
  • Sector
    • Water and other urban infrastructure and services
Project Name Improving Operational Performance of the Water Supply Sector Project
Project Number 44002-022
Country / Economy Viet Nam
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8357-VIE: Improving Operational Performance of the Water Supply Sector
ATF - Netherlands TA Grant US$ 1.10 million
TA 8357-VIE: Improving Operational Performance of the Water Supply Sector (Supplementary)
Technical Assistance Special Fund US$ 500,000.00
TA 8357-VIE: Improving Operational Performance of the Water Supply Sector (Supplementary)
ATF - Netherlands TA Grant US$ 200,000.00
TA 8357-VIE: Improving Operational Performance of the Water Supply Sector (Supplementary)
ATF - Netherlands TA Grant US$ 120,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Water and other urban infrastructure and services / Urban water supply

Gender Some gender elements
Description

In February 2011, the Asian Development Bank (ADB) approved a $1 billion multitranche financing facility (MFF) to fund operational improvements for urban water supply during 20112020. The MFF provides access to financing to many water companies to help them improve their operations and expand their water supply systems, including intake works, production transmission, and distribution. The facility addresses water as a limiting factor for growth and inclusiveness by expanding water supply services to peri-urban areas, ultimately increasing competitiveness and assisting the transformation of cities and towns to keep pace with rapid urbanization. This capacity development technical assistance (TA) is being processed in parallel with the MFF to help the Government of Viet Nam improve water supply services.

In 2007, the government formulated a progressive legal framework that requires water companies to be equitized and to operate on business principles that would improve their performance. The government's Socio-Economic Development Plan, 20112015 includes water sector objectives: (i) identify water as a limiting factor of growth, and support local economic development by developing modern urban infrastructure, and (ii) improve the quality of life and health of people by providing access to safe water. The country program for the water sector in ADB's country partnership strategy, 20122015 for Viet Nam is consistent with these policies.

The TA aims to prepare selected water companies to operate on sound business principles in order to efficiently fulfill their service obligations and establish a partnership with the private sector on a voluntary basis.

Project Rationale and Linkage to Country/Regional Strategy

The TA will contribute to the capacity development of selected water companies borrowing under the MFF to improve service to users, specifically targeting improved business planning and financial sustainability, nonrevenue water (NRW) reduction, energy efficiency, and water safety plans. The TA will help water companies define service contracts with local governments (as owners of the water companies and regulators of the water services) and users. The service contracts will include qualitative and quantitative key performance indicators, defined in the business plan, as a basis for regulation by contract, in the absence of an independent regulator. The TA will assist in strengthening the corporatization process to increase the accountability and performance of water companies, and to enable private sector participation in different forms, including PPPs. The TA will address institutional development of the water sector to support (i) the National NRW Reduction Program, which defines ambitious targets for NRW reduction from the current national average of 30%, and (ii) the circular that defines the methodology to calculate water tariffs.

In 2014, ADB increased the TA amount by $500,000 to finance a pilot Pre-Feasibility Study under Public Private Partnership for the water and sanitation of Nghi Son Economic Zone, Thanh Hoa Province, Viet Nam (COMPLETED)

In 2015, ADB increased the TA amount by $200,000 to finance assistance to the water companies to fast track project implementation of PFR1, PFR2, PFR3 and PFR4. The TA was extended to 2018.

In 2016, ADB increased the TA amount by $120,000 to allocate additional training resources and provide comprehensive technical support to MFF0054-VIE and TA implementation.

Impact

Improved institutional framework for water supply services in Viet Nam

Project Outcome
Description of Outcome

Improved business practices of selected water companies, serving as best practice examples for the Viet Nam water sector

Progress Toward Outcome Ongoing. The TA received additional $120,000 in February 2017 to support water companies under the MFF0054-VIE Water Sector Investment Program, contributing to the TA outcome.
Implementation Progress
Description of Project Outputs

1. Improved performance and accountability of selected water companies

2. Introduction of pragmatic procedures for implementing the NonRevenue Water Reduction Program

3. Support for monitoring and evaluation mechanisms for water supply services

Status of Implementation Progress (Outputs, Activities, and Issues)

1) Ongoing: Definition of Key Performance Indicators and discussion with participating water companies on schedule for continuous improvement process and monitoring of water tariff increase to financial sustainability and compliance with Vietnamese Legislation

2) Completed: Review of Nonrevenue Water (NRW) under the Operation & Maintenance Diagnostic of the water companies. Water companies are borrowing under MFF0054-VIE for NRW

3) Ongoing: Monitoring and assistance to project implementation under MFF0054-VIE, especially L2754-VIE, L2961-VIE and L3251-VIE.

Completed: Development of Public Private Partnership initiatives in water supply in line with the Government support for equitization of the water and sanitation sector.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Strong donor coordination on the project design to supplement the policy dialogue and capacity development under MFF0054-VIE
During Project Implementation The TA was extended to 2018 to support the implementation of MFF0054-VIE. Some water companies under the MFF0054-VIE expressed cancellation of loans. The TA monitors the current situation of water sector in Viet Nam, and conduct appropriate stakeholder consultations to analyze, understand and justify the loan cancellation.
Business Opportunities
Consulting Services The TA will finance international consultants (estimated 36 person-months) and national consultants (52 person-months).
Procurement Equipment will be procured in accordance with ADB's Procurement Guidelines (2010, as amended from time to time).
Responsible ADB Officer Ishii, Satoshi
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Urban Development and Water Division, SERD
Executing Agencies
Asian Development Bank
Timetable
Concept Clearance 13 Nov 2012
Fact Finding 05 Sep 2012 to 07 Sep 2012
MRM -
Approval 24 Apr 2013
Last Review Mission -
Last PDS Update 18 May 2018

TA 8357-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Apr 2013 07 Jun 2013 07 Jun 2013 31 Dec 2014 31 Dec 2018 31 Mar 2019
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 1,420,000.00 0.00 0.00 0.00 0.00 1,920,000.00 17 Jun 2022 1,712,880.42

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.


Evaluation Documents See also: Independent Evaluation

Title Document Type Document Date
Viet Nam: Improving Operational Performance of the Water Supply Sector Validation of Technical Assistance Completion Reports Dec 2020

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.