44529 PPI data update note 9 May 2008 Private water projects at a new peak in 2007, but investment levels low In 2007, 14 low- and middle-income countries implemented at least 62 water projects with private participation, according to just-released data from the Private Participation in Infrastructure Project Database.1 These projects accounted for more than US$3.2 billion in investment commitments. In addition, a combined electricity and water project was implemented, representing investment of US$600 million.2 The number of new projects involving the private sector returned to the peak of 2005, while annual investment commitments (hereafter, investment) grew by 18%, though from a low level in 2006 (figure 1).3 Figure 1 Private participation in water in developing countries, 1990­2007 Investment commitments (2007 US$ billions) 15 New projects 70 Chilean privatizations 60 12 Manila concessions 50 9 Buenos Aires 40 concession Johor 6 concession 30 Syabas 20 3 concession 10 0 0 1990 1995 2000 2005 2007 Other investment commitments Large commitments Projects Source: World Bank and PPIAF, PPI Project Database. Highlights of 2007. New private activity was highly concentrated in 2007. Two countries, China and Georgia, accounted for 63% of the investment. The top four countries by investment (with Mexico and Brazil added to the list) represented 79%. And just two countries, China and India, accounted for 76% of the projects. New private projects focus on treatment plants, which accounted for 40 of the 62 water contracts in 2007-- though just 47% of the investment. Among the treatment plant contracts, 14 are for potable water plants, accounting for almost 75% of the investment in treatment plants. Twenty-two are for sewerage facilities, accounting for most of the remaining investment. The other 4 contracts are for combined potable water and 1Data on water projects with private participation include primarily medium-size and large projects as reported by the media and other public sources. Small-scale private service providers, which also play an important role in the water sector, are generally not included because of the lack of public information. Other contracts may have been omitted for the same reason. The Czech Republic and Estonia became high-income countries according to the 2007 World Bank country classification (released in July 2007) and are therefore excluded from the 2007 water data update. 2The combined electricity and water project is not included in the aggregate data here. Such projects are included in the energy analysis because the investments in most of these projects are usually directed to electricity. 3The 2007 water data update of the PPI Project Database (ppi.worldbank.org) includes 21 more projects for 2001­ 06 than were reported in the 2006 update (PPI data update note 4). As a result, investments in 2006 changed from the US$2 billion reported in 2006 to the US$2.75 billion reported in 2007. Investment in 2005 changed from US$1.7 billon to US$2.1 billion. Most of the newly reported projects were for treatment plants in China. -1- sewerage plants. China implemented 31 of the treatment plant contracts, covering a total capacity of 6.2 million cubic meters a day. The other 9 contracts for treatment plants were implemented in seven countries and covered a total capacity of 810,000 cubic meters a day. The other 22 water contracts, involving investment of US$1.7 billion, are for utilities. These water utility contracts cover sizable populations in several regions. Twelve cover service areas with a combined population of 11.3 million; the largest of these contracts are for the water utilities of three Chinese cities-- Tianjin (1.75 million), Lanzhou (1.73 million), and Huangpi (1.13 million)--and for Georgia's Tbilisi Water System (1.1 million). Six contracts provide for 310,000 water connections; the management contract for Cameroon's Camerounaise des Eaux is the largest one (194,000 connections), followed by India's Latur water utility (100,000). The contracts covered a range of types: there were 29 build-operate-transfer (BOT) contracts, 20 concessions, 5 divestitures, 5 management contracts, 2 leases, and 1 build-own-operate (BOO) contract. In addition, a combined electricity and water BOO contract was implemented. Regional activity. Six regions reported new water projects reaching financial closure (tables 1 and 2). · In East Asia, China, Indonesia, and Malaysia implemented new projects. In China 42 projects reached financial closure, involving investment of US$1.6 billion. Of these contracts, 31 are for water and sewerage treatment plants (21 sewerage treatment plants, 7 water treatment plants, and 3 combined water and sewerage treatment plants). The other 11 are for water utilities. The 8 utility contracts for which information is available cover concession areas with a total population of 7.6 million. In Indonesia a concession was signed for a water treatment plant in Pangkalpinang City, and in Malaysia a concession for a water treatment plant in Hulu Langat. · In Europe and Central Asia private activity was limited to three contracts. In Georgia the Tbilisi Water System was fully divested, involving investment of US$435 million. In Poland the city of Toszek divested 50% of its water utility. In Romania a 25-year lease contract was signed for the water and sewerage utility of the town of Otopeni. · In Latin America four contracts reached financial closure. In Brazil the city of Rio Claro signed a 30- year concession for sewerage services. In Chile the district of Pudahuel signed a 15-year concession for its water and sewerage utility. In Mexico two BOT contracts were implemented in the State of Queretaro--one for a water treatment plant, the other for a wastewater treatment plant. · In the Middle East and North Africa, Algeria and Oman implemented five projects, involving investment of US$1 billion. In Algeria two 5.5-year management contracts were signed for water and sewerage utilities: one for the city of Oran, and the other for the regions of Annaba and El Tarf. In addition, a 25-year BOT contract was signed for a desalination plant with a capacity of 200,000 cubic meters a day in Oran. In Oman two BOO projects reached financial closure. One is for a desalination plant with a capacity of 80,000 cubic meters a day in the Ash Sharqiyah region. The other is for a combined desalination and power plant with a capacity of 120,000 cubic meters a day and 678 megawatts. · In South Asia, India implemented five projects, involving investment of US$140 million. A 25-year BOT contract for a desalination plant, Chennai Desalination Ltd., reached financial closure. In the city of Nagpur two management contracts were signed: a 5-year contract for operating a water treatment plant and a 7-year contract for managing a water utility. In Latur, Maharashtra, the local government signed a 10-year concession for its water utility system. In the city of Kolkata the local government signed a 30-year BOT contract for a water supply and sewerage system in Section V, Salt Lake. · In Sub-Saharan Africa, Cameroon signed a 10-year lease-affermage contract for the national water utility. Sudan implemented a BOT contract for a water treatment plant in Omdurman, near Khartoum. Potential new projects. Besides the 62 projects that were implemented, six contracts were awarded in 2007 but had not reached financial closure or been signed by December of that year. In Brazil an 18-year BOT contract for sewerage service was awarded in the state of Bahia. In Algeria four BOT contracts were -2- awarded for desalination plants to be located in Cap Djinet, Fouka, Mostaganem, and Souk Tleta. In Jordan a BOT contract was awarded for a water utility in Amman. Canceled and distressed projects. Three contracts were canceled in 2007. In the Russian Federation the municipality of Tomsk terminated the 49-year lease contract signed in 2003 for the city's water and wastewater services. In Bolivia the national government finalized the announced termination of the 30-year concession for water and sewerage services in La Paz and El Alto. In Colombia the government of the city of Bogota canceled the 20-year BOT contract for the Tibitoc Water Treatment Plant. By 2007 the number of canceled and distressed water projects had reached a total of 55, representing 9% of all water projects and 32% of committed investment in 1990­2007. Concluded projects. Five contracts concluded in 2007. Four of them were management contracts: one for the water utility in the cities of Gjakova and Rahovec, in Serbia; one for the water utility in the cities of Bukhara and Samarkand, in Uzbekistan; one for the water utility of Kavaja, in Albania; and one for Guyana's water utility. The fifth was a BOT contract for a wastewater project in Cuernavaca, Mexico. Table 1 Summary of water projects reaching financial or contractual closure in 2007 Projects by subsector Projects by type of private participation Investment commitments Treatment Greenfield Management Lease Region Country Projects (US$ millions) plant Utility project Concession contract contract Divestiture East Asia China 42 1,605.23 31 11 23 15 1 0 3 and Indonesia 1 .. 1 0 0 1 0 0 0 Pacific Malaysia 1 .. 1 0 0 1 0 0 0 Europe Georgia 1 435 0 1 0 0 0 0 1 and Poland 1 .. 0 1 0 0 0 0 1 Central Asia Romania 1 .. 0 1 0 0 0 1 0 Latin Brazil 1 257 0 1 0 1 0 0 0 America and the Chile 1 3.1 0 1 0 1 0 0 0 Caribbean Mexico 2 278.8 2 0 2 0 0 0 0 Middle Algeria 3 230 1 2 1 0 2 0 0 East and North Oman 1 173 1 0 1 0 0 0 0 Africa South Asia India 5 140.9 2 3 2 1 2 0 0 Sub- Cameroon 1 0 0 1 0 0 0 1 0 Saharan Africa Sudan 1 120.7 1 0 1 0 0 0 0 Total 62 3,243.73 40 22 30 20 5 2 5 Note: .. = not available. -3- Table 2 Water projects reaching financial or contractual closure in 2007 Note: .. = not available. East Asia and Pacific Type (subtype) Investment Project Sub- of private commitment Country Project name status sector participation (US$ millions) Capacity type Capacity Sponsor 1 China Baotou City Construction Treatment Greenfield project 52.63 Cubic meters 200 Dalian Dongda Environmental Wanshuiquan District plant (build, operate, per day Engineering Co. Ltd. (100%, Wastewater Treatment and transfer) (thousands) China) Project 2 China Beijing No. 10 Water Construction Treatment Greenfield project 197.37 Cubic meters 500 Golden State Environment Plant A plant (build, operate, per day (50%, United States) and transfer) (thousands) 3 China Binzhou City Nanhai Construction Treatment Greenfield project 9.47 Cubic meters 50 George Malaysia Berhad (60%, Water Supply Project plant (build, operate, per day Malaysia) and transfer) (thousands) 4 China China Water Affairs Operational Treatment Divestiture 23.03 Cubic meters 3,300 China Water Affairs Group Ltd. Investment Co. Ltd. plant (partial) per day (20%, Hong Kong, China) (thousands) 5 China Daming County Construction Treatment Greenfield project 6.26 Cubic meters 20 Golden State Environment Wastewater Treatment plant (build, operate, per day (100%, United States) Plant Phase I and transfer) (thousands) 6 China Danzhou City Water Operational Utility Concession 4.47 Population 210 China Water Industry Group Distribution Network (rehabilitate, (thousands) Limited (100%, Hong Kong, Project operate, and China) transfer) 7 China Dezhou City Xiajin Water Construction Treatment Greenfield project 13.47 Cubic meters 104 Hyflux (100%, Singapore) Supply Project plant (build, operate, per day and transfer) (thousands) 8 China Fengxiang County Construction Treatment Greenfield project 7.5 Cubic meters 20 Zhongxing Telecom (100%, Wastewater Treatment plant (build, operate, per day China) Project and transfer) (thousands) 9 China Foshan City Wastewater Construction Treatment Greenfield project 7.89 Cubic meters 50 Bio-Treat Technology Ltd. Treatment Project plant (build, operate, per day (100%, China) and transfer) (thousands) 10 China Gaoan City Water Affairs Operational Utility Concession 13.16 Population 830 China Water Affairs Group Ltd. Group Ltd. (rehabilitate, (thousands) (60%, Hong Kong, China) operate, and transfer) 11 China Guangdong Xinhui Water Operational Treatment Divestiture 9.7 Cubic meters 235 China Water Affairs Group Ltd. Affairs Co. Ltd. plant (partial) per day (40%, Hong Kong, China) (thousands) -4- 12 China Guanyun County Water Construction Treatment Greenfield project 16.75 Cubic meters 80 Hyflux (100%, Singapore) Supply and Wastewater plant (build, operate, per day Treatment Plant and transfer) (thousands) 13 China Haikou City No. 1 Water Operational Utility Concession 122.82 Population 800 Veolia Environnement (49%, Affairs Company Limited (rehabilitate, (thousands) France) operate, and transfer) 14 China Hanzhong City Xingyuan Operational Utility Concession 13.59 Population 280 InterChina Holdings (100%, Water Supply Company (rehabilitate, (thousands) Hong Kong, China) Ltd. operate, and transfer) 15 China Hu County Wastewater Construction Treatment Greenfield project 12.89 Cubic meters 60 Beijing Sound Environment Treatment and Recycling plant (build, operate, per day Industry Group (100%, China) Project and transfer) (thousands) 16 China Huangpi Sewerage Construction Utility Greenfield project 43.42 .. .. Asia Water Technology (100%, Collection Network (build, operate, Singapore) Project and transfer) 17 China Huangpi Water Supply Construction Utility Concession 110.53 Population 1,130 Asia Water Technology (70%, Facilities (rehabilitate, (thousands) Singapore) operate, and transfer) 18 China Jining Haiyuan Water Operational Treatment Concession 5.27 Cubic meters 30 China Water Industry Group Co., Ltd. plant (rehabilitate, per day Limited (70%, Hong Kong, operate, and (thousands) China) transfer) 19 China Jinzhou Water Affairs Operational Utility Divestiture 30.7 Population 880 China Water Affairs Group Ltd. Group Co., Ltd. (partial) (thousands) (51%, Hong Kong, China) 20 China Lankao County Operational Treatment Greenfield project 4.34 Cubic meters 25 Anhui Guozhen Environmental Wastewater Treatment plant (build, operate, per day Protection Science & Plant and transfer) (thousands) Technology Co., Ltd. (100%, China) 21 China Lanzhou City Water Operational Utility Concession 225 Population 1,730 Veolia Environnement (45%, Supply Group (rehabilitate, (thousands) France) operate, and transfer) 22 China Linyi Hedong Water Co., Operational Treatment Concession 5.92 .. .. China Water Industry Group Ltd. plant (rehabilitate, Limited (60%, Hong Kong, operate, and China) transfer) 23 China Lujiang County Urban Construction Treatment Greenfield project .. Cubic meters 20 Anhui Daliang Real Estate Wastewater Treatment plant (build, operate, per day Company Ltd. (..%, China), Plant Project and transfer) (thousands) Lujiang County Changfa Real Estate Development Company Ltd. (..%, China) 24 China Nanjing City North Operational Treatment Concession 65.79 Cubic meters 300 Golden State Environment Wastewater Treatment plant (rehabilitate, per day (100%, United States) Plant operate, and (thousands) transfer) -5- 25 China Nanjing Jiangning City Construction Treatment Greenfield project 14.47 Cubic meters 120 Asia Environment Holdings North Wastewater plant (build, operate, per day Limited (100%, Singapore) Treatment Plant and transfer) (thousands) 26 China Suizhou City Urban Construction Treatment Greenfield project 6.58 Cubic meters 50 Suizhou City Yulong Water Wastewater Treatment plant (build, operate, per day Supply Company Ltd. (100%, Plant Phase I and transfer) (thousands) China) 27 China Suqian City Yanghe Operational Treatment Management and 0 Cubic meters 10 Anhui Guozhen Environmental Wastewater Treatment plant lease contract per day Protection Science & Plant (management (thousands) Technology Co., Ltd. (100%, contract) China) 28 China Suzhou City Five Operational Treatment Concession 59.21 Cubic meters 360 Salcon Bhd (70%, Malaysia) Wastewater Treatment plant (rehabilitate, per day Plants operate, and (thousands) transfer) 29 China Taizhou City North Construction Treatment Greenfield project 7.24 Cubic meters 80 Golden State Environment Wastewater Treatment plant (build, operate, per day (100%, United States) Plant and transfer) (thousands) 30 China Tianjin City North Water Operational Utility Concession 406.5 Population 1,750 Veolia Environnement (49%, Affairs Company Limited (rehabilitate, (thousands) France) operate, and transfer) 31 China Wangcheng County Construction Treatment Greenfield project 17.1 Cubic meters 40 Asia Environment Holdings Wastewater Treatment plant (build, operate, per day Limited (100%, Singapore) Plant Stage I and transfer) (thousands) 32 China Wuhu City Tianmenshan Construction Treatment Greenfield project 9.21 Cubic meters 60 Anhui Guozhen Environmental Wastewater Treatment plant (build, operate, per day Protection Science & Plant Phase I and transfer) (thousands) Technology Co., Ltd. (100%, China) 33 China Xi'an City Chang'an Construction Treatment Greenfield project 17.63 Cubic meters 100 Beijing Sound Environment District Wastewater plant (build, operate, per day Industry Group (100%, China) Treatment Project and transfer) (thousands) 34 China Xianning City Wenquan Operational Treatment Greenfield project 5.47 Cubic meters 60 Beijing Sound Environment Wastewater Plant plant (build, operate, per day Industry Group (100%, China) and transfer) (thousands) 35 China Xinmin Wastewater Construction Treatment Greenfield project 13.55 Cubic meters 60 Dayen Environmental Ltd. Treatment Plant plant (build, operate, per day (100%, Singapore) and transfer) (thousands) 36 China Xuyi County Water Operational Utility Concession 5.21 .. .. Golden State Environment Supply Company (rehabilitate, (100%, United States) operate, and transfer) 37 China Yangzhong City Water Operational Treatment Concession 6.45 Cubic meters 75 Golden State Environment Company plant (rehabilitate, per day (75%, United States) operate, and (thousands) transfer) 38 China Yichun City Water Operational Treatment Concession 3.95 Cubic meters 100 China Water Industry Group Supply Co., Ltd. plant (rehabilitate, per day Limited (51%, Hong Kong, operate, and (thousands) China) transfer) -6- 39 China Yidu Wastewater Operational Utility Greenfield project 8.26 .. .. Jiangsu Weide Environmental Treatment Project (build, operate, Technologies Company Ltd. and transfer) (..%, China) 40 China Yongshun County Construction Treatment Greenfield project 7.3 Cubic meters 30 Easen International Company Wastewater Treatment plant (build, operate, per day Ltd. (..%, United States), Plant and transfer) (thousands) Grupo Tradebe (..%, Spain) 41 China Zhaoan County Construction Treatment Greenfield project 8.55 Cubic meters 60 Grupo Tradebe (..%, Spain), Wastewater Treatment plant (build, operate, per day Easen International Company Plant and transfer (thousands) Ltd. (..%, United States) 42 China Zhoukou City Water Operational Treatment Concession 6.58 Cubic meters 30 China Water Affairs Group Ltd. Affairs Group Ltd. plant (rehabilitate, per day (60%, Hong Kong, China) operate, and (thousands) transfer) 43 Indonesia Pangkalpinang City Construction Treatment Concession (build, .. Cubic meters 12 Darco (70%, Singapore) Water Treatment Plant plant rehabilitate, per day operate, and (thousands) transfer) 44 Malaysia Sungai Lolo Water Operational Treatment Concession .. .. .. Puncak Niaga Holdings Berhad Treatment Plant plant (rehabilitate, (83%, Malaysia) operate, and transfer) Europe and Central Asia Type (subtype) Investment Project Sub- of private commitment Country Project name status sector participation (US$ millions) Capacity type Capacity Sponsor 1 Georgia Tbilisi Water System Operational Utility Divestiture (full) 435 Population 1,093 Multiplex Solution (100%, (thousands) Switzerland) 2 Poland ZGKiM Toszek Operational Utility Divestiture .. Number of 1.9 Remondis (50%, Germany) (partial) connections (thousands) 3 Romania Otopeni Water and Operational Utility Management and 0 Number of 2 Veolia Environnement (100%, Sewerage System lease contract connections France) (lease contract) (thousands) -7- Latin America and the Caribbean Type (subtype) Investment Project Sub- of private commitment Country Project name status sector participation (US$ millions) Capacity type Capacity Sponsor 1 Brazil Rio Claro Sewerage Operational Utility Concession (build, 257 Population 160 Odebrecht SA (100%, Brazil) System rehabilitate, (thousands) operate, and transfer) 2 Chile Izarra de Lo Aguirre Construction Utility Concession (build, 3.1 Number of 2 .. Water Concession rehabilitate, connections operate, and (thousands) transfer) 3 Mexico Queretaro Aqueduct II Construction Treatment Greenfield project 246 Cubic meters 130 Mitsui (26%, Japan), ICA SA de plant (build, operate, per day CV (37%, Mexico), Fomento de and transfer) (thousands) Construcciones y Contratas SA (FCC) (26%, Spain) 4 Mexico San Pedro Martir Construction Treatment Greenfield project 32.8 .. .. Mitsui (50%, Japan), Tyco Wastewater Treatment plant (build, operate, International (50%, United Plant and transfer) States) Middle East and North Africa Type (subtype) Investment Project Sub- of private commitment Country Project name status sector participation (US$ millions) Capacity type Capacity Sponsor 1 Algeria Annaba and El Tarf Operational Utility Management and 0 Population 1,000 Gelsenwasser (100%, Management Contract lease contract (thousands) Germany) (management contract) 2 Algeria Oran Management Operational Utility Management and 0 Population 1,500 SUEZ (29%, France), Criteria Contract lease contract (thousands) Caixa Corp SA (28%, Spain) (management contract) 3 Algeria Tlemcen Hounaine Construction Treatment Greenfield project 230 Cubic meters 200 Sacyr Vallehermoso (SyV) Desalination Plant plant (build, operate, per day (17%, Spain), ACS Group and transfer) (thousands) (Actividades de Construccion y Servicios) (17%, Spain), Abengoa (17%, Spain) 4 Oman Sur Desalination Plant Construction Treatment Greenfield project 173 Cubic meters 80 Veolia Environnement (52%, plant (build, own, and per day France), Suhail Bahwan Group operate) (thousands) (48%, Oman) 5 Oman Barka II Power and Construction Electricity, Greenfield project 600 MW 678 SUEZ (48%, France), Mubadala Desalination Facility treatment (build, own, and Development Company (48%, plant operate) United Arab Emirates) -8- South Asia Type (subtype) Investment Project of private commitment Country Project name status Subsector participation (US$ millions) Capacity type Capacity Sponsor 1 India Chennai Desalination Construction Treatment Greenfield project 115 Cubic meters 100 Abengoa (25%, Spain), IVRCL Ltd. plant (build, operate, per day Infrastructures & Projects Ltd. and transfer) (thousands) (75%, India) 2 India Kolkata Salt Lake Construction Utility Greenfield project 16.9 Cubic meters 20.45 Tata Enterprises (100%, India) Section V Water Supply (build, operate, per day Project and transfer) (thousands) 3 India Nagpur 24x7 Water Construction Utility Management and 0 Number of 10 Veolia Environnement (100%, Supply lease contract connections France) (management (thousands) contract) 4 India Nagpur Pench Treatment Construction Treatment Management and 0 Cubic meters 23 Veolia Environnement (100%, Plant Rehabilitation plant lease contract per day France) Project (management (thousands) contract) 5 India Latur Water Supply Construction Utility Concession 9 Number of 100 UPL Environmental Engineers Scheme (rehabilitate, lease connections Ltd. (33%, India), Hydro- or rent, and (thousands) Compe Enterprises (33%, transfer) Cypurs), Subhash Projects & Marketing Ltd. (33%, India) Sub-Saharan Africa Type (subtype) Investment Project of private commitment Country Project name status Subsector participation (US$ millions) Capacity type Capacity Sponsor 1 Cameroon Camerounaise des Eaux Operational Utility Management and 0 Number of 194 Office National de l'Eau lease contract connections Potable (ONEP) (..%, (lease contract) (thousands) Morocco) 2 Sudan Omdurman Water Operational Treatment Greenfield project 120.7 Cubic meters 200 Biwater (49%, United Treatment Plant plant (build, operate, per day Kingdom) and transfer) (thousands) -9-