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State of Water Supply and Water Facility in Rural and Urban Areas in Vietnam

by: Johnny Pan, SPI

This document is targeted for the following audience: 

  • European SMEs and start-ups who provide technological solutions and knowledge on water management including agriculture and agrifood;

  • European SMEs and start-ups who provide technical solutions and knowledge for wastewater treatment.


The Department of Water Resource Management (DWRM) is responsible for managing water in Vietnam and implementing the state management on water resources in the country. According to DWRM, water resources in Vietnam are diverse, and sourced from natural and artificial water bodies. The water resources are under increasing pressure from over-exploitation from increased irrigation demand, urban and industrial development, as well as the rise of population. In this context, ensuring national water security is a priority for the government. 

The current situation of Vietnam’s water supply includes:

  • The surface water potential is estimated at about 835,000 million m3 per year, though this number can fluctuate between 630,000-650,000 million m3 and 1,000,000 million m3. 

  • Water quality and quantity are affected by both natural and social factors. As 60% of Vietnam’s surface water is generated outside the country, its potential is affected by the source countries’ socio-economic development. This may also run the risks of running out and of being contaminated. 

As atmospheric temperatures rise, so does evaporation. This leads to decreasing water resources and increasing water demand for irrigation. On the other hand, Vietnam has abundant groundwater resources, with total potential exploitable reserves of the country's aquifers estimated at nearly 60 billion m³ per year. Less than 5% of these reserves are exploited. 

In order to use water resources in a sustainable manner, Vietnam is implementing the following principles:

  • Water resources should be systematically used according to river basin and water structures, not according to administrative divisions.

  • The use of water resources must be coupled with protection against scarcity and contamination.

In recent years, water stress has had a considerable impact on Vietnam’s socioeconomic development. The government has been investing in water-related fields, such as water distribution systems and waste water management. According to the Water Supply and Sanitation in Vietnam from World Bank, the Vietnamese water supply and sanitation sector is implementing investments up to a total of 2.5% of GDP. By 2025, most urban cities will have centralized municipal wastewater treatment and collection systems, and 70-80% of municipal wastewater will be collected and treated. 

On Level 2 you can find information about the relevant policies for development of the water supply and the water infrastructure in Vietnam, while Level 3 will tell you more about business activities (through case studies) in water sector in Vietnam and what the EU has contributed in the country. With this document, it will enrich your knowledge of this particular sector in the country and it will help to identify available opportunities.


This page will provide a deeper understanding of government policy in addressing Vietnam’s Water Supply and Sanitation, development of the water infrastructure, and investment planning for water supply and its facility.

The Law on Water Resources was formulated in 1998 as the basis for water governance in Vietnam, including the use of surface water, rainwater, ground water and sea water. Since 1995, water resources agencies including Department of Water Resource Management (DWRM) have implemented development plans to improve water resources management. This has helped to restore previously degraded water structures and establish new structures in a balanced manner. It is clear that further improvements in water resources management are required to benefit from the investment.

The quality and reliability of water supply is a challenge both inside and outside the major cities. In rural areas, more informal management have resulted in ineffective operation and long-term maintenance. The implementation strategy for taking sanitation and hygiene promotion has not formed to scale. 


Important Actors 

The main water sector actors of in Vietnam are: 

  • Ministry of Agriculture and Rural Development (MARD): Established in 1995 – from a combination of the Ministry of Agriculture and Food Industry, Ministry of Forestry and Ministry of Irrigation. The political tasks of MARD cover not only the specific requirements of agriculture, forest and irrigation, but also the overall aspect of developing agriculture and rural areas sustainably, and protecting natural resources (including lands, water and forests). It is also responsible for integrating agriculture, forestry and irrigation with rural development, noting that there are more than 60 million rural residents which represents 78% of the national population.

  • Department of Water Resources Management (DWRM): Provides assistance to the Ministry in implementing state management on water resources including rain water, surface water and ground water.


Rural water supply and sanitation

MARD is responsible for rural water through the Water Resources Directorate. MARD implemented the National Target Program (NTP) for Rural Water Supply and Sanitation. The key action plans for rural water supply include:

  • Carry out a comprehensive review of the effectiveness of existing and alternative scheme regarding management (and ownership) models

  • Develop and implement recommendations to professionalize management and make use of private sector capabilities

  • Develop provincial level plans for managing water quality at scheme level

Based on the action plans, Vietnam has invested an estimated €448 million per year in order to meet its rural water supply targets for 2020 of 75% of the rural population using a minimum of 60 litres per capita per day of clean water.


Urban water supply and sanitation 

The Ministry of Construction is the lead agency for urban water supply and sanitation. The services providers are typically state-owned enterprises with legally independent status and many are combined water and drainage companies. The key actions for urban water supply include:

  • Allow tariffs to reach commercially viable levels whereby utilities can achieve full cost recovery through independent economic regulation. 

  • Increase autonomy for utilities, allowing them to increase operation and maintenance budgets to levels that enable adequate maintenance to be provided and sustained. 

  • Enhance access to commercial finance for utilities by providing government guarantees for utilities. 

  • Introduce incentives and obligations to improve the quality and reliability of service provision by establishing an independent regulator.

In addition, the New Rural Development Programme (NTP-NRD, 2016-2020) was designed to upgrade services and infrastructure for rural communities across all 63 Provinces of Vietnam. Through implementing the programme, the use of surface water was eliminated, and the use of improved sanitation facilities was increased by 12.5% during 2010-2017.


Investment planning 

The Vietnam government is attempting to increase private sector investment for both urban and rural water supply and sanitation. To date, the investment plans for rural water and sanitation have been made significantly over the past few years. From 2013 to 2018 the following results were achieved:

  • More than 1.8 million people gained access to improved water resources and more than 1.4 million people gained access to improved sanitation services.

  • The average coverage for water supply and sanitation services in eight geographically-clustered provinces in Vietnam reached 72% and 88% respectively in 2018, up from the baseline of 36% and 56% in 2012.

  • The rural water supply and sanitation planning, monitoring and evaluation process at both national and local levels was streamlined to follow a structured and scientific approach. Further, elements of the World Bank’s Programme-for-Results approach were incorporated into the broader national programmes.



This page will showcase the presence of national and global companies in tackling the water issues in Vietnam, and provide an overview of the EU-Vietnam bilateral relationship and EU-ASEAN relationship - particularly with regards to relevant EU funded projects implemented in Vietnam.

Presence of national and global companies tackling the issues

A series of national and European/global companies have been involved in the investments in the water distribution systems and infrastructure in Vietnam. Examples include the following:

  • Saigon Water Corporation (SAWACO), a state-owned enterprise, received EUR 136 million in August 2017 from Vietcombank and the HCM City Finance and Investment Company (HIFC) to finance Ho Chi Minh City (HCMC) major water supply system upgrade across 11 projects. Since 2015, HIFC and SAWACO have worked together in 33 projects to construct reservoirs and water pipes with a total investment of EUR 123 million, of which HIFC contributed EUR 91 million. In addition, Vietcombank has cooperated with a number of SAWACO’s subsidiaries to provide an electronic water bill payment service to 795,000 households in HCMC.

  • ABB, a European-based leading global technology company, supports water sustainability project in Ho Chi Minh City. ABB energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s has 110,000 employees in over 100 countries. The technologies provided by ABB are being used by Ho Chi Minh City’s local water utility SAWACO to address water leakage challenges and support long-term growth.

  • Royal Haskoning DHV, a Netherland-based international engineering consultancy firm, was selected to provide project implementation support and capacity development for Dong Hoi, Quang Binh province in Vietnam, one of the twenty most climate hazard prone provinces in the country and is particularly vulnerable to storms, floods, typhoons, river and sea bank erosion and salinity intrusion. The support contributes to improving climate resilient urban infrastructures, benefitting over 100,000 people.


EU-Vietnam Bilateral Relationship

The EU and Vietnam signed a Trade Agreement and an Investment Protection Agreement on 30 June 2019. This provides opportunities to increase trade and support jobs and growth for both parties, through:

  • Eliminating 99% of tariffs

  • Reducing regulatory barriers and overlapping red tape

  • Opening up services and public procurement markets

  • Making sure the agreed rules are enforceable

In addition, the EU has been investing heavily in Vietnam since the country opened its economy to the world. The EU now ranks number 5th out of Vietnam’s 80 Foreign Direct Investment (FDI) partners. Overall, the investment from the EU totalled EUR 20.3 billion in 2,133 projects by the end of 2018.

For example, the EU and France support Vietnam’s management of water and natural resources through the Water and Natural Resources Management (WARM) Facility. The agreement was signed in 2020, aiming to strengthen their joint cooperation for increasing resilience to climate change and natural hazards in Vietnam. WARM will help to improve the capacity in managing water resources in more sustainable manner. It will also support strategic investment projects in the areas of water and other natural resources management. Under the agreement, a grant of EUR 20 million was provided by the EU. This will be considered funding for mobilizing WARM Facility over the period 2021-2029.


ASEAN-EU S&T collaboration

The ASEAN-EU Science, Technology and Innovation collaborations address the key societal challenges for both regions. Water is one such key challenge. A selection of EU-funded projects related to water in Vietnam are few projects presented below:

  • WANASEA: This is an Erasmus+ programme with the aim to foster the multidisciplinary research and to improve the cooperation between Higher Education Institutions, Research Centres, and Stakeholders in Cambodia, Thailand and Vietnam and EU - specifically in the Water and Natural Resources Management (WNRM) sector. In the long run, the collaboration is expected to lead to a set of policy recommendations which will contribute to the sustainable development of water and natural resources and solve some of the current transboundary issues related to fisheries and construction of dams on the Mekong River and its main tributaries in Vietnam.

  • Since the 1970s and 1980s, the Netherlands has been contributing to the development of water resources in Vietnam. Partly due to the similarities of low-lying deltas, there has been close cooperation between Vietnam and the Netherlands for knowledge and technical expertise, such as in the Strategic Partnership Agreement (SPA) on Water Management & Climate Change, and also elaborated in the Mekong Delta Plan. The recent development of the investment landscape, in particular the streamlining of Public Private Partnership (PPP) projects and a continued focus on the impacts of climate change, indicate potential business opportunities in the country that are worth exploring. More information about the PPP projects between Netherlands and Vietnam can be seen here

As one of the countries that is most severely affected by climate change and natural disasters, Vietnam is at increasing risks of coastal erosion, urban flooding and drought, due to rising temperatures and sea levels, and the increased frequency and intensity of extreme weather events combined with population growth and urbanization. Vietnam is now moving towards becoming a middle income country and its socio-economic development plans include a stronger emphasis on environmental and climate sustainability. There will be increased opportunities for EU-Vietnam cooperation in the water sector, with the EU providing highly relevant knowledge and technology to this priority area of Vietnam’s future development. 


Business Opportunities for EU companies

  • Within the Water Supply chain, offering technologies on: converting brackish water to drinking water; updating ageing distribution systems; and providing water purifiers for households.

  • Within Wastewater Treatment: providing solutions and technology transfer for industrial wastewater treatment projects.

  • Within Solid Waste treatment: providing landfill equipment; incinerators; and composting technologies.

  • Forming partnerships with Vietnamese companies to bid for internationally funded projects.

  • Manufacturing equipment locally.



Last updated: 03.12.2020 - 15:53
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