Bringing massive liquidity to resource investment

Water investment and financing firms will help provide the hefty funding needed for water conservancy in the decade ahead, said a senior official with the Ministry of Water Resources.

"Up to 154 cities and counties in 24 provinces, autonomous regions and municipalities now have water investment companies, which are accelerating water conservancy and helping quench the thirst for funding," said Gao Jun, an official at the ministry's finance department.

The water companies - now mainly backed by public funds - are expected to also help in management after completion of projects, he said.

The ministry envisions that investment in water supply and management will grow more market oriented and provide sound economic returns.

The move is part of efforts to implement a top central government document from 2011 that mandates more investment in water conservancy over the next 10 years.

The ministry is also encouraging diverse investment organizations to use financing modes including BOT (build-operate-transfer), TOT (transfer-operate-transfer) and BT (build-transfer).

Public listing, issuance of corporate bonds and shares, and private placement are also supported.

The government has decided massive investment is needed for water supplies and vowed to increase the figure to 4 trillion yuan ($645.2 billion) by 2020.

At the beginning of last year, the central government called on local authorities to set aside 10 percent of revenues from land sales for agricultural irrigation, the weakest link in water conservation, which has suffered from a chronic shortage of investment.

The combined local fund hit 27 billion yuan in 2011 and is expected to see steady growth, Gao said.

"To channel more capital to the sector is crucial to supplementing government spending, bank loans and public funds," he added.

Statistics show loans for water conservation and facilities grew on average by 11 percent from 1997 to 2011.

The ministry has recently joined hands with six other government agencies or financial institutions to give the green light to the country's ever growing demand for investment in water conservancy construction.

yangcheng@chinadaily.com.cn