MIGA has issued additional coverage in the amount of $3.12 million for the Second Darco Water (Qianyuan Water) Project in China. The additional coverage is for Darco Environmental Pte., Ltd. (Darco) of Singapore’s equity investment in the project and covers the risk of expropriation.
MIGA’s Board approved the issuance of guarantees to the project up to $19.5 million in May 2007. The investor signed a contract in the amount of $7.56 million in fiscal year 2007. The additional coverage of $3.12 million is supporting the project’s financial restructuring.
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.
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 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 challenge 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.
