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Projects

Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
SCB Wastewater Treatment Project
Project ID
10290
Fiscal year
2012
Status
Active
Guarantee holder
Yet to be identified lender
Standard Chartered Bank
Investor country
Singapore
Host country
China
Environmental category
B
Sector
Water and Wastewater
Date SPG disclosed
August 29, 2011
Project Board date
September 29, 2011
Gross exposure
 $57.0 million
Project type
Non-SIP
Strategic priority area
Complex Project
South-South
ESRS
China SCB Wastewater ESRS
EIA
EIA-Shengfang1
EIA-Shengfang2
EIA-Bazhou
EIA Summary-TangshanRecycleWater

This summary covers non-shareholder loans by Standard Chartered Bank (SCB) in Singapore and a yet to be identified Singaporean lender to support investment into three wastewater treatment plants in China. SCB, on behalf of the investors, has applied for a MIGA guarantee of $57 million for a period of up to six years against the risk of expropriation.

The project involves the acquisition, expansion, and upgrading of three wastewater treatment plants in Hebei Province. These plants are held by Maxrise Envirogroup Ltd (Maxrise) in Hong Kong SAR, China, which is owned by two Singaporean companies. The total investment for the project is estimated at $86 million. In addition to their own $26 million equity investment, the two Singaporean companies have asked SCB and a yet to be identified lender to provide $60 million in non-shareholder loans to Maxrise. Maxrise (as an intermediate lender) will then lend to the three wastewater treatment project enterprises.

Environmental Categorization

The project is a category B under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

Wastewater treatment is a critical environmental issue in China especially in the second and third level cities such as Tangshan and Bazhou in Hebei Province. Limited wastewater treatment capacity and the low grade of treated wastewater are major challenges for these cities and have significant public health implications. The project is part of the local governments’ plan to expand wastewater treatment capacity and upgrade quality of treated water. By introducing two international professional and experienced wastewater treatment companies, the project will be able to significantly improve its plants in these cities by increasing their treatment capacity and upgrading their water quality.

The proposed project is aligned with the World Bank Group’s Country Partnership Strategy for China which calls for the use of MIGA guarantees to support infrastructure development through foreign direct investment. This project is also aligned with MIGA’s strategic priorities of supporting South-South investments and complex infrastructure projects.

 
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