PIDG makes $8.68 million investment in Hoa-Binh-Xuan Mai clean water treatment facility

PIDG makes $8.68 million investment in Hoa-Binh-Xuan Mai clean water treatment facility

The Private Infrastructure Development Group (PIDG) has made an equity investment of VND218.6 billion ($8.68 million) in Hoa Binh-Xuan Mai Clean Water Limited Liability Company, a project run by AquaOne Water Corporation.

Deployed through PIDG’s project development solution, InfraCo, the funding will be used to develop a potable water treatment facility including raw water intake system, treatment lines, storage, and transmission and distribution pipeline components. The plant will process 150,000 cubic metres of water per day and will supply improved access to treated water in rural and suburban parts of Phu Tho province (previously Hoa Binh).

“Equity investments in infrastructure projects play a pivotal role in de-risking early-stage development and catalysing wider private sector participation,” said Dennis Foo, PIDG's head of business development (Asia) – InfraCo. "Through our investment in AquaOne, we aim to prove the commercial viability of large-scale, greenfield water projects in Vietnam. This will show that critical infrastructure can be bankable while delivering sustainable impact for communities as well as strengthening private sector participation."

Hoa Binh-Xuan Mai will be developed and operated with guidance from PIDG's project development and impact teams, with a focus on health, safety, environmental, and social (HSES) governance. PIDG's involvement will seek to ensure full compliance with international standards including the IFC Environmental and Social Performance Standards, the Principles of the United Nations Global Compact, and the Voluntary Principles on Security and Human Rights.

This investment complements previous investments including a VND875.1 billion ($34.5 million) guarantee through PIDG's guarantee solution, GuarantCo, for Vietnam's first 20-year project and green bond issued by Hoa Binh-Xuan Mai in 2024. The guarantee was accompanied by a $119,000 technical assistance grant to partially finance the transaction costs. The bond has been oversubscribed by major local institutional investors, the funds of which are also funding the project.

“PIDG's latest equity investment in AquaOne has allowed us to achieve financial closure for the Xuan Mai Water Supply Project. Together with the funds raised from our bond issuance, we are on a fast track to delivering treated water to customers by early 2026,” said Hung Manh Pham, chairman and CEO of Hoa Binh-Xuan Mai.

The project represents a key step in responding to the Vietnamese government's efforts to transition away from underground sources, which can be environmentally harmful. Over extraction of groundwater can lead to environmental issues such as ground sinking and increased water toxicity due to naturally occurring arsenic being drawn into the water supply.

By using river water as feedstock, Hoa Binh-Xuan Mai will reduce the environmental impact from their water treatment plant and ensure a higher quality of water provided to consumers – including ethnic and low-income households – in Phu Tho province.

Hoa Binh-Xuan Mai is the first of two components of the Xuan Mai water treatment plant currently under development by AquaOne. The other component, Xuan Mai-Ha Noi, which will distribute water to Hanoi, has also received funding from PIDG through a guarantee and equity commitment. The VND317.2 billion ($12.5 million) guarantee brings GuarantCo's total guarantee exposure to the projects to VND1.2 trillion ($47 million). Upon receiving required approvals, the equity component will include the financial close of Xuan Mai-Hanoi.

VIR