Boosting Water Quality in China

© Sound Global

Four years ago, most of the residents in Yanghe, a small coastal town in eastern China, lacked reliably safe drinking water in their homes. Families and businesses depended almost exclusively on underground wells that occasionally dried up or introduced pollutants in their water supplies.

Things changed dramatically for more than 100,000 people in Yanghe in 2011, when IFC’s client United Water built a modern water distribution system, giving homes and commercial enterprises access to reliable tap water.

That investment was among the first in a series of IFC interventions that have helped improve access to clean water, expand wastewater services, and reduce water losses through greater efficiency across towns in China.

IFC works with both private and publicly owned enterprises to improve the quality and efficiency of water services in emerging markets. This includes drinking water, wastewater treatment, and water resource management work.

In China, about two thirds of the country’s 600 cities experience regular water shortages. Of those, more than 100 cities are seriously affected by the problem. Water pollution caused by inadequately treated domestic sewage and agricultural and industrial discharge continues to impact the health and livelihoods of millions of people.

Recognizing these challenges, the Chinese government has been working to improve water resource management and implement stronger pollution and waste control measures—which are critical to the country’s future sustainable development.

Working with the government and other partners, IFC has focused on mobilizing the financing required for upgrades and expansions to water services across the country. We have provided loans and equity investments to leading operators aiming to improve the quality and reach of water service provision in China. This has included more than $600 million committed in the past two years.

“China’s water sector is in desperate need of investment and upgrade, and we are working hard to mobilize financing in a way that extends the reach of essential services in townships across the country,” said Elena Bourganskaia, who leads IFC’s Water and Municipal Infrastructure practice.

Everbright Water, China Water Affairs, United Water, and Beijing Enterprises Water are some of the companies that have partnered with IFC in this effort. In several cases, the operators have developed models that could be replicated in other parts of the world.

IFC has also worked to draw other investors into China’s water sector. In December 2015, 13 commercial banks joined IFC to provide loans to Beijing Enterprises Water, a company working to improve water and wastewater treatment across nine Chinese provinces, including several in frontier regions, where poverty is high.

“IFC’s support provides the necessary capital for us to pursue our expansion plans, including improving treatment quality in 12 municipalities,” said Mr. Li Yongcheng, Vice Chairman of Beijing Enterprises Water Group. “This partnership will mean significant environmental and health benefits for local populations.”

Published in March 2016