IFC invests in DNP Water for better access to water in Vietnam

DNP Water currently 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 one million cubic meters per day by 2025.

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

As agreed by all parties, the financing package may increase to $24.9 million to support the further growth of the company.

Binh Hiep Water, a plant owned by DNP Water

“We greatly appreciate IFC’s long-term funding in an important, but quickly changing sector,” said Vu Dinh Do, DNP Water chairman. “IFC’s extensive water sector expertise will help us bring international best practices to the Vietnamese water sector and improve our sustainability standards.”

“With access to affordable and clean water a key development target, IFC’s investment will help encourage private-sector participation in this important one and the growing privatised water sector in Vietnam,” said Kyle Kelhofer, IFC senior country manager for Vietnam, Cambodia, and Lao PDR. “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.”

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

IFC has extensive experience in supporting private sector investments in water and wastewater worldwide. So far, IFC has made 55 investments totalling at $2.2 billion.

Headquartered in the northern province of Bac Giang, DNP Water owns and operates, either directly or indirectly, four water treatment projects and water supply companies in Vietnam. Two water companies under its ownership are Binh Hiep Water and Dong Tam Water, while DNP Bac Giang Water Project and Long An Water Supply Project are currently under construction.

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