Chongqing Water Project

MIGA has issued two guarantees of $72.2 million for Suez Environnement SAS (“SE”), a French company, covering its investments in Chongqing Water Group Co., Ltd (“CWG”) and Chongqing Sino-French Tangjiatuo Wastewater Treatment Co., Ltd (“Tangjiatuo Wastewater Co.”) for the Chongqing Water Project in China. The coverage is for a period of up to 15 years against the risks of transfer restriction and expropriation.

The project involves the acquisition of a minority stake in CWG by SE and the expansion of the existing Chongqing Tangjiatuo Wastewater Treatment Plant and the installation of sludge dryers.  Its major development impacts are to attract FDI to this under-developed region and sector and to restructure and improve the water and wastewater sector in Chongqing municipality by introducing Suez Environnement as a strategic investor. The project will also increase the municipality’s wastewater treatment capacity, help address the issue of sludge treatment, and contribute to the improvement of water quality in the Yangtze River. Under the expansion, the capacity of the Tangjiatuo wastewater treatment plant will be increased from 300,000 m3/d to 400,000 m3/d and sludge dryers will be installed to allow transportation and treatment of the sludge.

China’s western provinces have experienced rapid growth, but they continue to lag behind in attracting foreign direct investment. Chongqing municipality, in southwest China, has a population of about 32 million. The fast urbanization and industrial growth in the region have resulted in serious wastewater issues. It is estimated that the municipality generates nearly one billion tons of wastewater a year. Most of the untreated wastewater is discharged directly into the Yangtze and Jialing rivers, threatening the quality of water supply. The wastewater treatment represents a major environmental challenge for Chongqing, one of the largest cities in China, situated upstream of the Three Gorges dam on the Yangtze River.

The Chongqing municipal government has actively encouraged participation and involvement of foreign companies in the water sector to address these challenges. SE  and NWS will together bring in € 154 million of investment. The involvement of foreign companies will also facilitate the introduction of advanced water and wastewater treatment technologies and management, including improvement of project management and corporate governance. This project is fully consistent with the World Bank Group’s China Country Partnership Strategy (2006-2010) and the Chinese government’s western development strategy.

The project is also aligned with MIGA’s strategy of promoting investment in infrastructure projects.