MIGA has issued a guarantee of US$7.56 million to Darco Environmental Pte. Ltd. of Singapore for its equity investment in the Deqing Darco Producing Water Company. The coverage is for a period of up to 20 years, against the risk of expropriation.

The project consists of the construction of a water treatment plant, on a build-operate-transfer (BOT) basis, that will supply 100,000 cubic meters per day of potable water to residents and industries in Deqing County. Raw water will be sourced from the Dui Hekou reservoir and piped to a water treatment facility, 20 kilometers away from the reservoir.

Deqing is one of the fastest developing counties in Zhejiang province with an estimated population of 430,000. Due to its rapid growth, the county has been facing a serious shortage of potable water as well as degradation in the water quality. The project will address the water supply shortage and is expected to contribute to local economic development, urbanization, and public health.

Managing resource scarcity and environmental challenges is one of the five themes of the World Bank Group’s Country Partnership Strategy for China. Construction of water supply and wastewater treatment plants is a key element of this theme. The investment will bring technological know-how to China’s water sector and, if successfully implemented, should have a positive demonstration effect on other water companies in China.