In the last few years, the spotlight in Southeast Asian (SEA) countries has been on massive urban infrastructure development. Countries like Vietnam and Laos that have low levels of water supply and sanitation coverage are taking steps to improve their service levels. Investments are being planned to develop efficient urban facilities. However, given the inherent public good nature of urban infrastructure projects, sourcing enough public capital is always a constraint. As a result, taking on new projects becomes an issue for SEA countries. Understanding these needs and limitations, multilateral funding agency Asian Development Bank (ADB) has become a key pillar of financial support for ASEAN. Funds in the form of loans, grants and technical assistance have been provided to bridge the infrastructure gap. Through this continued support, infrastructure development in these countries is now slowly picking up pace, helping bring an increasing proportion of their population under efficient civic services. The bank has further prioritised its funding for the region and framed a programme covering the period 2019-22 to continue to support the economies in ensuring greater development and prosperity.

Current operations

ADB has been working closely with ASEAN countries to provide customised financial and technical solutions that respond to their development needs. Based on the current portfolio of projects, ADB has pledged funds amounting to $1,940 million to ensure adequate water supply and urban development in the SEA region. Of this, the maximum share of 46 per cent has been allocated to Vietnam, followed by Indonesia and Cambodia with each having a 15 per cent share. Laos PDR and Myanmar too received 10 and 6 per cent of the total funds.

Cambodia: ADB has been supporting Cambodia since 1966 and is the country’s largest multilateral development partner. During 2010-18, the bank had committed funds amounting to $3.52 billion for implementation of about 383 projects. Of the total funds allocated, about $492.24 million (~14 per cent) was released for execution of 36 urban infrastructure projects. One of the projects is the Urban Water Supply and Sanitation Project for which a loan worth $84 million was released by the bank. As part of the project, work to improve and expand urban water supply services in selected provincial towns in Cambodia was taken up. Another project, Provincial Water Supply and Sanitation, was sanctioned with a loan worth $50 million in August 2017. It involved execution of water supply and sanitation works in Sihanoukville, Siem Reap, Battambang and Kampong Cham. The project is currently under implementation.

Other than this, a loan amounting to $107 million was approved for the Integrated Urban Environmental Management in the Tonle Sap Basin Project. As part of the project, infrastructure flood protection, drainage, wastewater management and treatment, and solid waste management infrastructure are being developed in the Kampong Chhnang and Pursat region.

With this continued hand-holding by ADB, the Cambodian government has managed to provide water supply to about 96,550 rural households, and sanitation to 50,325 households between 2010 and 2017.

Indonesia: Like Cambodia, Indonesia too has received support from ADB. Between 2010 and December 2018, a total sum of $2.36 billion was disbursed for taking up about 94 urban water and sanitation projects in the country. The Metropolitan Sanitation Management Investment Project is one of the projects currently under implementation, for which a loan worth $80 million was granted in May 2014. The project aims to improve urban wastewater services in the cities of Cimahi, Jambi, Makassar, Palembang and Pekanbaru by developing wastewater treatment facilities, new separate sewerage systems and wastewater treatment plants (WTPs).

Myanmar: ADB engaged with Myanmar in early 2012 and has since been supporting the country’s national development strategies. As of December 31, 2018, an amount of $1.32 billion has been disbursed for several projects, with urban water supply and sanitation projects taking up a sum of $241 million. So far 19 projects have been supported through this funding including the Mandalay Urban Services Improvement Project, for which a loan worth $60 million was sanctioned in September 2016. As part of the project, a new WTP and upgradation and extension of the existing water supply network has been taken up in the city. Besides, the city’s first centralised wastewater collection and treatment plant, which will produce biogas from sludge and help power the plant, will also be developed.

Vietnam: Vietnam is one of the founding members of the ADB and, since 1966, it has been receiving monetary support from the bank to meet its infrastructure demand. During 2010-18 (until December 2018), the country received cumulative assistance amounting to $10.58 billion for funding about 544 infrastructure projects. Of these projects, 55 comprised urban water supply and sanitation infrastructure. With provision of timely financial assistance, the bank has helped provide water supply to 175,340 households and sanitation to 135,118 households.

Some of the projects approved for execution during the period are the Ho Chi Minh City (HCMC) Wastewater and Drainage System Improvement Project for which a loan worth $5 million was approved on October 14, 2016, and the Water Sector Investment Programme – Tranche 3, for which a loan worth $ 142.5 million was approved in March 2015. As part of the HCMC Wastewater and Drainage System Improvement Project, the bank has suggested prioritising the completion of the sewer system around the Tham Luong-Ben Cat canal during the first phase of investment in 2019.

Laos PDR: For Laos PDR, ADB continues to be the largest external funding agency. ADB has so far disbursed loans amounting to $427 million to improve the country’s urban water and sanitation services. In September 2018, the bank approved an additional financing of $30.5 million in the form of a grant to add six more towns to an ongoing Water Supply and Sanitation Sector Project, which is expected to benefit 100,000 urban residents. The ongoing project received a $35 million loan from ADB in 2013 and, so far, the project has helped provincial water utilities provide more effective and efficient water supply and sanitation services to 110,000 urban residents in nine towns in Lao PDR. Apart from expanding the number of project areas and beneficiaries, the additional financing will also add 150 km of water supply distribution pipelines in the towns selected under the project. Through the project, the government aims to provide piped water to 90 per cent of urban areas and sanitation to all urban areas by 2030. The expanded project is expected to be completed by the first quarter of 2023.

The Philippines: The Philippines government aims to ensure inclusive growth, and develop a socially responsible society, and a globally competitive economy. For this, it has been developing required infrastructure in the country with the assistance of ADB.  So far, the bank has funded about 74 water and urban infrastructure projects and has committed funds worth $1.25 billion. One of the projects being funded is the Angat Water Transmission Improvement Project for which a loan worth $123.3 million was sanctioned in May 2017. The project aims to improve the reliability of raw water supply for Metro Manila by rehabilitating the transmission system from Ipo to La Mesa and introducing water safety, risk and asset management plans. It has been awarded to Italian contractor CMC di Ravenna and is currently under execution. Further in April 2019, the bank announced plans to lend another $100 million to expand the project.

Upcoming portfolio of projects

Apart from the existing portfolio, ADB has set operational priorities under the Southeast Asia Urban Development [SEUW] Programme, as part of which it aims to improve urban water supply and sanitation facility in all regions. The programme will be implemented during the period 2019-22. Several projects have been planned for funding. To begin with, in 2019, the Third Rural Water Supply and Sanitation Project in Cambodia and the Angat Water Transmission Improvement Project in the Philippines will be funded. Thereafter, in 2020, Tranche 1 of the Liveable Cities Investment Programme in Cambodia and Indonesia will be provided for. Besides, funds for the execution of the Yangon Urban Service Improvement Project in Myanmar and other projects in Vietnam and Malaysia will be supported by ADB. In 2021 and 2022, the Water and Sanitation Improvement and Investment Programme in Laos PDR and Phase II of the Mandalay Urban Service Improvement Project in Myanmar will be funded.

Conclusion

As per estimates given by the ADB in its report titled “Meeting Asia’s Infrastructure Needs”, around $3 trillion in infrastructure investment will be required between 2016 and 2030. Given the quantum of funds required, ADB will continue its partnership with ASEAN by not only providing financial support but becoming the backbone for utilities and government through its technical assistance. The bank will aid utilities by not just providing liquidity but by offering improved technology solutions related to data quality, analysis, assessment and design. Focus will also be given to densely populated areas and on overcoming the challenges related to waste and climate change. The clear roadmap laid by ADB effectively shows the resolve of the bank to bridge the infrastructure gap and help countries meet their development goals.