Vietnam Water Market Insights

Source: Water & Sewerage / Overseas Construction Association Kim Hyo-eun

Vietnam‘s remarkable economic growth is no secret. But behind the glittering growth, there's another reality we need to pay attention to. It's the ’water infrastructure‘ problem. Despite its abundant water resources, outdated water infrastructure that cannot keep up with the pace of rapid urbanization and industrialization is a challenge that Vietnam must address, but it is also a "blue ocean" of new business opportunities.

What will Vietnam's water market look like in 2025? We've summarized the current state of Vietnam's water infrastructure and its future prospects based on the most up-to-date information available.

1. ‘Lights and shadows’ of Vietnam's water market infrastructure’

💧 Abundant but unreachable water

Vietnam is blessed with abundant water resources thanks to the Red and Mekong rivers. Thanks to this, the water supply penetration rate in urban areas has soared to 951 TP3T (as of ’23). However, the Penetration in rural areas still at 60% levelin the U.S., with a clear infrastructure gap between urban and rural areas.

🔧 Water supply with both improvements and challenges

The horrendous leakage rate of over 501 TP3T in the past has been reduced through ongoing pipeline improvement projects. Significantly improved to around 20-251 TP3T levelswhich is a remarkable achievement. But there's still a significant amount of water that's disappearing into the ground.

National water production has also increased to about 11 million cubic meters per day, but this is not enough to keep up with population growth and urban expansion in large cities like Ho Chi Minh City and Hanoi. This is why there is a constant need to build new water treatment plants.

🌊 Urgent challenge, sewage treatment system

The most pressing issue with Vietnam's water infrastructure is sewage treatment.

• Urban sewage treatment penetration rate: Approx. 15% (as of ’23). Most domestic sewage flows untreated into rivers and streams.
• Industrial park wastewater treatment: Although new industrial parks are required to install wastewater treatment facilities, Only about 301 TP3T of existing industrial parks operate facilitiesand industrial wastewater issues are also significant.

The wastewater treatment capacity of about 1 million cubic meters per day is not enough to handle the amount of wastewater generated.

2. who manages it, and how does the money flow?

🏢 Complex management structure and low water tariffs in Vietnam's water market

Vietnam's water industry is structured so that the central government (Ministry of Construction, Ministry of Environment and Natural Resources) sets policy, while local governments (People's Committees) are responsible for actual operations. Water tariffs remain dependent on government subsidies, which keep them low and far below the cost of production.

In Ho Chi Minh City, water costs around VND15,000 (about $830) per cubic meterwhich is very affordable. Ironically, low-income residents without piped water often pay more for water through informal channels.

💳 The amazing changes digital transformation has brought about

The most significant change from the past is the ‘fee collection’ system.

• Meter penetration: in big cities like Hanoi and Ho Chi Minh City Water meter penetration is 901 TP3T or higherwhich is a significant increase.
• Contactless payments: The ubiquity of online payments through mobile banking, e-wallets (MoMo, ZaloPay), etc. has dramatically improved the efficiency of fare collection.

3. Vietnam's Blueprint for the Future: Investment Opportunities in Vietnam's Water Market

🤝 Beyond ODA to PPP

Until now, large-scale water treatment projects in Vietnam have relied heavily on Official Development Assistance (ODA) funding from Japan (JICA), Korea (KOICA), and the Asian Development Bank (ADB), but the government is now looking to reduce its reliance on ODA and, Actively attract foreign investment through public-private partnerships (PPPs)You're making a move.

🚀 2030 goal, huge market opens up

The Vietnamese government's goals are clear. To increase urban sewage treatment rates to 501 TP3T by 2030.

Achieving this goal will require massive investment in the trillions of dollars going forward. This represents a huge opportunity for those of us with the relevant skills and capital.

✨ Investment opportunities to watch

• Building large-scale water treatment facilities in large cities
• Customized wastewater treatment facilities and solutions for industrial parks
• Replacing and maintaining aging water mains
• Build an IoT-based smart water leak management system

Vietnam is no longer stuck with outdated infrastructure - it's taking a giant step towards ‘clean water‘, boosting efficiency through digital transformation and equipping itself with a new growth engine: PPPs. If you're looking for new business opportunities amidst Vietnam's dynamic transformation, now is the time to set your sights on the water market.

Overseas projects : View

Centrifugal dehydrator : View