MIGA guarantees desalination plant in China
The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, announced on Dec. 21st its support to a seawater desalination plant in Cangzhou New Bohai Development Zone (BNAIZ) in the Hebei Province.
In an area suffering from water scarcity, the project will provide up to 50,000 cubic meters of water a day in its first phase to contribute to the continued economic development of the zone.
The BNAIZ is a state-level supported economic development zone, established in 2007. It includes the Huanghua Port, the Zhongjie Industrial and Chemical Industries Park, and the Nandagang Industrial Park. The total area of the BNAIZ is 2,375 km2 and the workforce is estimated to 500,000.
MIGA has issued $9.9 million in guarantees to Aqualyng Global Pte., Ltd. to cover its equity investment in the construction and operation of the plant. Use of seawater for industrial purposes is a nascent industry in China and the government is promoting the technology to address the serious water-supply issues.
Moreover, in order to reduce the reliance on local-government finances and diversify funding sources for the country's massive infrastructure investments, the central government is encouraging private domestic and foreign investment to support public private partnership (PPP) projects, including in the water supply and wastewater treatment sector.
MIGA Executive Vice President and CEO Keiko Honda, said:
"China's chronic water shortage places the country well below the average freshwater resources per capita—at 28 percent. With the country's rapid urbanization and industrialization, China is smartly looking at many sources of capital for infrastructure investment—and MIGA is pleased to play a role."
Aqualyng is based in Singapore and designs, builds, finances, owns and operates seawater reverse osmosis desalination facilities.
This is the second of Aqualyng's desalination projects that MIGA has supported in China. In 2010, MIGA issued a guarantee to Aqualyng's plant in the Caofeidian Industrial Zone also in Hebei Province.
Sunil Ghorawat, CEO of Aqualyng, said:
"As we continue to grow internationally, we speak from experience when we say that MIGA's support and partnership has been absolutely pivotal to our decision to develop this new plant."