The Asian Development Bank (ADB) has approved $1 billion in loans to Vietnam to help improve clean water access for 3 million people and address a pressing infrastructure headache.
The first loan for $138 million will go to a project in Ho Chi Minh City to improve water pressure and coverage for over 500,000 people, including providing 20,000 families with their first water connection, it said in a statement on Tuesday.
Four out of 10 families in Vietnam's biggest cities are not connected to a central water supply system and only one in three towns in the country of 87 million people has piped water. Where there are pipe networks, some are so decrepit that as much as 30-40 percent of water is lost before it reaches consumers, it said.
"This is essentially pouring cash down the drain," Ayumi Konishi, the ADB's country director for Vietnam, said in a statement.
"Making an up-front investment to plug the leaks gives consumers a more dependable water supply, enhances public health and provides water companies with significant cost savings."
One aim of the program is to lower water loss in urban areas to less than 20 percent, bringing Vietnam's cities in line with more affluent Asian cities such as Seoul, it said.
Patchy water supply is one of the infrastructure problems regularly cited as barriers limiting investment. Many have got worse as the economy has sped ahead and cities have grown.
The ADB's assistance is part of an investment program of nearly $2.8 billion funded by the Vietnamese government, other development partners and financiers.
In December international donors including the ADB pledged $7.9 billion to Vietnam for 2011. That figure was down from a record $8.2 billion pledged for 2010.
The ADB's money will go toward improving and expanding clean water supply in large cities, installation of new pipelines and the repair and extension of existing networks, it said. The programme will also help improve water company management.
Vietnam wants 90 percent of the population to enjoy piped water by 2020 and the entire population to be covered five years later.