Vietnam Water Supply Development Project

closed

The objective of the Urban Water Supply development Project is to improve water, and household sanitation services in district towns, and large urban centers in ways that are financially, and environmentally sustainable, thus enhancing the health, and economic potential of resident households. The "competition route" component will expand service to currently un-served district towns, to be delivered in three steps: a) preparation of sub-projects; b) design and construction of facilities; and, c) operation of completed water supply facilities. In the "performance route" component, investment funds will be available to water supply companies (WSCs) which achieve defined levels of performance based on the results of a 2002 benchmark exercise, a performance that will determine the type of investments WSC can make with project funds. Funds will cover design and construction of water supply facilities. The third component - non-subsidized WSS lending facility - will complement the development of broad infrastructure finance instruments, by offering non-subsidized, long-term project loans that focus on water supply and sanitation. Through preparatory work with the International Development Association (IDA), the Ministry of Finance (MoF) and the Development Assistance Fund (DAF) it has been agreed to spearhead this initiative. DAF is a Government policy-lending institution that has been providing direct loans to several provincial water supply companies. DAF will act as a catalyst for providing medium- to long-term non-subsidized project loans to the water supply sector. Building capacity in the sector is the fourth component, designed to improve performance by providing WSCs with practical tools to tackle sectoral problems, and act as a foundation for wider application in the country. Finally, managing project implementation, the fifth component, will address the overall management of project implementation, under the responsibility of the Central Project Unit (CPU).