Shenzhen Water (Group) Company Ltd.

MIGA has issued a guarantee of $40 million to Compagnie Générale des Eaux of France, covering its $40 million direct equity investment in Shenzhen Water (Group) Company Ltd. in the People’s Republic of China. The coverage is for a period of up to 15 years against the risk of expropriation.

This project processes raw water abstracted by a state-owned company and treats sewage collected through the municipal wastewater collection network. The project supplies 90 percent of residential, commercial, and industrial customers in the Shenzhen special economic zone in Guangzhou province. The company currently supplies tap water but intends to start providing fully potable tap water by 2012.

Shenzhen Water services 2.5 million customers with five water treatment plants and four wastewater treatment plants. It has a daily water supply capacity of 1.9 million tons and a wastewater disposal capacity of 1.5 million tons. The company currently treats 75 percent of its wastewater, the largest percentage and the first system of such a scale in any city in China and plans to expand its coverage in the coming years in line with the goals set by the Shenzhen municipality.

The project will help the Chinese government address water resource problems that are particularly acute in fast-growing urban areas. MIGA’s involvement is vital to ensure private sector participation in the Shenzhen water sector, helping to reduce budget spending by the municipal government. For customers, having fully potable water will eliminate the need to boil or buy drinkable water. The participation of Compagnie Générale des Eaux, which operates water projects around the world, is expected to have a demonstration effect on China's water sector.