The Asian Development Bank (ADB) signed a USD 25M debt facility with VA Tech Wabag Limited (Wabag) to support sanitation and water security through the development of new sewage treatment plants in India.
The financing will be used for long-term capital requirements for engineering, procurement, and construction, and the subsequent operation and maintenance of the sewage treatment plants. ADB will also provide technical assistance of up to $35,000 to enhance Wabag’s capacity to assess and mitigate environmental and social risks for future projects.
“The disposal of wastewater without proper treatment has put significant pressure on India’s already scarce water resources and the quality of those resources,” said ADB’s Private Sector Operations Department Director General Suzanne Gaboury. “This project is ADB’s first private sector financing in India’s water sector and will help to crowd in urgently needed international and domestic financing for the sector to ease water stress as demand increases.”
India is facing severe water stress, with demand expected to reach double the available water supply by 2030. Less than 30% of the water released back into rivers is treated, rendering about one-third of river water unfit for human consumption. Private water companies face difficulties in raising long-term working capital financing due to perceived high risks and low interest among domestic financing institutions, as the sector presents limited profit opportunities.