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USD100m loan from World Bank to enhance rural water and sanitation services in China

The World Bank has approved a loan of USD100 million through a public- private- partnership (PPP) to develop and expand the water supply and sanitation in rural areas of Sichuan Province China.

The World Bank and the IFC (The International Finance Corporation) – World Bank Group’s private sector arm – cooperated jointly to organize the project and will be the first World Bank-financed PPP project in the water sector in China.

World Bank Country Director for China Martin Raiser said:

“This project will support improved water supply and sanitation services for more than 200,000 residents in rural areas in Sichuan. It will contribute to domestic and global public goods by protecting the environment through reduced discharge of untreated wastewater into the tributaries of the Yangtze River. The project also promotes a more transparent service and financing model through a public-private-partnership.”

In a number of rural areas in China access to water supply and sanitation services is still problematic, for example; merely  15 percent of household sewage is collected and suitably treated and only 73 percent of residents in the those areas can reach a piped water supply.

The Sichuan Water Supply and Sanitation Public Private Partnership Project will establish a modern water supply and sanitation utility through a 25-year performance-based investment and management contract.

The contract will be authorized between the Jingyang District (where the project will be implemented) and an experienced operator who will be selected through a competitive bidding process and in line with international best practices.

It is estimated that approximately 235,000 residents will benefit from the improvements to the infrastructure through the water supply and sanitation project which also includes financing the following:

  • Water treatment plants and pipelines
  • Sewer networks and wastewater treatment plants
  • Household service connections

The World Bank and the IFC cooperating in PPP projects (such as the Sichuan Water Supply and Sanitation PPP project) aid leverage in commercial  debt and equity and design a roadmap for tariff adjustments to improve operational cost recovery for sustainable rural water supply and sanitation services.

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