Vietnam

Our Work in Vietnam

Our Role

The 2030 WRG initiated its Vietnam program following demonstrated interest from the Government of Vietnam in the multi-stakeholder partnership approach. In 2017, the 2030 WRG conducted a hydro-economic analysis of key water sector challenges, highlighting the water demand and supply gaps in four key river basins that make up 80% of Vietnam’s GDP and proposing a set of technical solutions to close the water gaps. Additional water-related challenges, including groundwater overexploitation, water pollution, deteriorated water infrastructure, emerging water -use conflicts, and increasing drought and flood events, are posing threats to socio-economic growth.

Building upon the 2030 WRG hydro-economic analysis, the World Bank Group is finalizing a Study on Water Governance in Vietnam, with technical support and stakeholder alignment facilitated by the 2030 WRG. The water governance report confirms threats to the water security of Vietnam and points to the areas that need additional investment and policy intervention, such as water pollution control, improving the water productivity of irrigated agriculture, and integrated planning and implementation of climate resilience strategies. The 2030 WRG is proposing two workstreams that are in alignment with the World Bank policy recommendations, namely: (1) agriculture water productivity enhancement and (2) optimizing governance and incentives for urban and industrial water.

The 2030 WRG team has established workstreams with multi-stakeholder working groups. The workstreams develop project concept notes and proposals to implement solutions; identify third-party implementers; mobilize financing for project implementation; and monitor project progress, resolving key bottlenecks as required. As a first step in this direction, the 2030 WRG has facilitated multi-stakeholder dialogue on potential policy interventions for the agriculture and urban-industrial sectors, with the aim of strengthening the policy framework to support sustainable water resources management.

Results and Outcomes

In 2018, the 2030 WRG conducted a series of stakeholder dialogues and roundtable discussions to gauge public, private, and community perspectives on the gap in water resources management and potential solution areas. These dialogues identified opportunities for collaborative models and policy revisions to accelerate water security planning and implementation.

Private sector roundtables were organized with the participation of key global and domestic private sector partners. The roundtables, structured as thematic dialogues, highlighted critical gaps in implementation and brainstormed on possible solutions:

Agriculture Water Productivity Enhancement 

The 2030 WRG held roundtable discussions with agribusinesses and government departments to identify key water challenges that could be tackled through a multi-stakeholder workstream. The discussions highlighted a need to shift to horticultural practices, higher-value crops, and more efficient water technologies. A number of agribusiness companies, including producers, off-takers, input suppliers, and equipment providers participated in the roundtables to discuss the challenges and possibilities for increasing water efficiency in agriculture. Other critical areas highlighted included the following:

  • Supply chain-driven water stewardship in key value chains, such as rice, coffee, pepper, and sugarcane: The suggestion of promoting alternate wet and dry practice in rice cultivation, as well as potential technological solutions, builds upon the recommendations of the 2030 WRG hydro-economic assessment for water gap closure in the Mekong Delta and aligns with the ongoing activities under the International Finance Corporation’s Sustainable Rice Platform. In the coffee value chain, there is a need to balance the quality of the product with sustainable practices and higher income for farmers. While Vietnam ranks among the top exporters of coffee globally, the sector is facing increasing water stress, especially in the Central Highlands. Targeting sugarcane smallholder farmers with interventions for livelihood improvement, along with good water management practices, was highlighted as a third potential area of focus.
  • Financing and implementation models for irrigation infrastructure: With low/no payment for water use in agriculture, farmers currently have no incentive to invest in water-efficient irrigation technology. Stakeholders highlighted the need to define the business case for irrigation infrastructure, particularly in areas prone to water shortages, such as the Central Highlands. With the identified business case, financing models for smallholder farmers with built-in credit risk mitigation measures need support.
  • Certification for responsible water use: A potential entry point to incentivize behavior change in farmers toward water-efficient practices is through the creation of consumer demand. There is currently no certificate or standard for responsible water use that covers water-efficient practices and the responsible use of fertilizers and pesticides. Such a standard could promote a shift in practices if certified farmers emerge as preferred vendors.

Additionally, May 2018 saw the release of a report co-authored by the 2030 WRG Vietnam program and titled “Vietnam: Towards a Clean, Safe and Resilient Water System.” The report, which was developed with the support of the World Bank’s Water Global Practice, forms part of a larger study on water governance in the country. It highlights the need to improve water governance and financing; better manage water risks, especially pollution; and extract the most use out of water, especially at farm level. The second phase of the governance study involves developing policy papers based on the report in consultation with all relevant stakeholders.

Governance and Incentives for Urban and Industrial Water

The roundtables included the participation of water utilities, industrial park developers, and textile businesses. The discussion centered on the need for incentives and mechanisms to promote water conservation, wastewater treatment, and reuse. Key opportunities highlighted included:

  • Greening of Eco-Industrial Parks Initiative: Since current enforcement of regulations linked to environmental compliance is weak, a certification scheme or index could be supported to assess and create transparency on compliance of industrial parks. This could also drive procurement decisions of buyers of industrial output, as they may shift procurement from non-compliant to compliant industrial parks.
  • Enabling and incentivizing centralized effluent treatment plant (CETP) operations: Existing regulations do not account for circular economy solutions and polluter pays principles for industrial CETPs, leading to insufficient treatment and reuse. In addition, businesses have no incentive to properly treat/reuse wastewater as the regulation makes no distinction between the tariffs applied for different pollution loads and types of effluents, as well as between freshwater supply and wastewater discharge. In this context, the regulatory framework can be strengthened to enable and incentivize CETP operational excellence and reuse, along with an appropriate tariff system based on polluter pays principles to support overall treatment efficiency. To this end, the 2030 WRG Vietnam program engaged in discussions with the Vietnam Textile Association on possibly forming a Multi-Stakeholder Platform that focuses on water resilience and sustainable growth in the sector, a major contributor to water pollution. The 2030 WRG believes that there is great potential for using performance-based public-private partnership (PPP) contracts to develop central effluent treatment plants, with the aim of moving the country toward wastewater reuse and repurposing. 
  • Supporting appropriate wastewater pricing for PPPs: Only 10% of municipal wastewater is currently treated. The current wastewater charge is not scientifically determined for different types of wastewater and pollutants, and is set as a percentage of water supply. Regulations could be amended to make this sector more sustainable and financially attractive, e.g. ring-fencing of wastewater charges, and payment assurance/guarantee from the government if wastewater charges are inadequate to cover costs, particularly to bring in private sector participation in the sector and mobilize finance for wastewater treatment plants.