The Private Infrastructure Development Group (PIDG) has invested 218.6 billion dong ($8.68 million) in equity in a clean water project that will begin supplying piped drinking water to rural and suburban households in Vietnam’s Phu Tho province, near Hanoi, next year.
The funding to the Hoa Binh-Xuan Mai Clean Water Limited Liability Company, a project under the AquaOne Corporation, follows an 875.1 billion dong guarantee to the company through the PIDG unit GuarantCo for a 20-year project and green bond, Vietnam’s first such transaction. The project has also received technical assistance of $119,000 from PIDG.
The latest investment will go towards developing a potable water treatment facility that will process 150,000 cubic metres of raw river water per day, as well as the plant’s storage, transmission, and distribution pipeline.
The facility, which will draw from the Da River, will enable a move away from groundwater sources, which the Vietnamese government has been urging due to environmental issues linked to the over extraction of groundwater.
The transaction, which brings Hoa Binh-Xuan Mai to a financial close, is aimed at de-risking the infrastructure project and attracting further private capital investment into the sector. The installation will be developed and operated with guidance from PIDG’s project development and impact teams, PIDG said in a statement.
“Through our investment in AquaOne, we aim to prove the commercial viability of large-scale, greenfield water projects in Vietnam,” said Dennis Foo, PIDG’s head of business development (Asia)-InfraCo, in the statement. “This will show that critical infrastructure can be bankable while delivering sustainable impact for communities as well as strengthening private sector participation.”
PIDG is also funding the second component of AquaOne’s clean water facility that is currently under development.
The Xuan Mai-Ha Noi project, which will distribute water to Hanoi City, has received both a 317.2 billion dong guarantee, and an equity commitment that is undisclosed. The financing is undergoing regulatory approvals, after which Xuan Ma-Ha Noi will also achieve financial close.
PIDG is funded by the governments of the UK, the Netherlands, Switzerland, Sweden, Australia, Canada and Germany. It operates mainly in sub-Saharan Africa and South and Southeast Asia, on climate projects and sustainable development.
Its other investments in Vietnam include a 168 MWp utility-scale solar farm located in Ninh Huan province that supplies power to the national grid, and electric motorbike startup Dat Bike.
