The World Bank’s Board of Executive Directors approved a loan to China for EUR 89.10 million (US$100 million) to improve rural water supply and sanitation services in Sichuan Province through a public-private partnership.

The Sichuan Water Supply and Sanitation project will be implemented in selected peri-urban and rural areas of the Jingyang District of Deyang City in Sichuan Province. The project will establish a modern water supply and sanitation utility through a 25-year performance-based investment and management contract, which will be signed between the Jingyang District and an experienced operator. The selection of the operator will be conducted through a competitive bidding process and in line with international best practices. The new utility will be required to provide quality services, which will be regularly assessed through customer satisfaction surveys and other feedback mechanisms. The local government will also receive technical assistance to effectively regulate the operator.

The project will finance water supply and sanitation infrastructure, including water treatment plants and pipelines, sewer networks and wastewater treatment plants, and household service connections. Nearly 235,000 residents are expected to benefit from these improvements.

The project will leverage commercial debt and equity, combined with the World Bank’s financing, and design a roadmap for tariff adjustments to improve operational cost recovery for sustainable rural water supply and sanitation services.

The project was prepared by a joint team of the World Bank and IFC, the World Bank Group’s private sector arm. It draws on both international practices and lessons learned from China’s own experience. It will be the first World Bank-financed public-private partnership project in the water sector in China.