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Finance Structure Wanted by Private

Operators of Water Businessin Southeast Asia

Kozo BandoGlobal Water Recycling and Reuse System Association (GWRA)

Kajima Corporation

24th April 2011

1. Introduction of GWRA

2. Current Financing Issues in the Region

3. Preferred Financing Arrangement

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a. Founded in November 2008 & has 50 membercompanies among industries of construction, plantengineering, electricity, machinery, material andfinance

b. Aims at supporting Japanese companies toparticipate in water business overseas

c. Promotes activities: Collection and analysis of water business information;

market, policies and risks Assistance of technology development through

establishment of demonstration plants with Governmentassistance

Assistance in project finding & project development

2

Introduction of GWRA

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c. NEDO demonstration study projectWATER PLAZA (Kitakyushu City)

Aeration tanks

100ｍ

Sewage water RO production: 1,000m3/ｄ

Sea water RO production: 400m3/ｄ

Total water production：

1,400m3/d

Sea

Final sedimentation tanks

Digestertanks

100ｍ

Test Bed area

Kitakyushu City

Test Bed

Water recycling facilities

MBR Area

UF/RO Area

Project site: 5 sections（9m×20m /section）

Demo Plants

Primarysedimentation

tanks

Offered by GWSTA（Global Water Recycling and Reuse Solution Technology Research

(6000㎡）

WATER PLAZA

Theme: Experimental research onintegrated system to recycle seawater

and sewage water.

8/6/2019 Finance Structure Wanted by PrivateOperators of Water Businessin Southeast Asia by Kozo Bando

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Current Financing Issues

1. Low Tariff

Viability Gap (not Bankable) Subsidized Operation

2. Difficult Financing Arrangement

No Long-Term Financing in Local Currency3. Premature Regulatory Conditions

PPP Regulation

Dispute Resolution

4. Risks Private Operators Cannot Control

Country Risk

FOREX Risk

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Preferred Financing Arrangement

1. Public Contribution

For Viability Gap Make Bankable

2. Use of ODA

Loan, Grant, Investment, 2-step Loan

Implementation by PPP Scheme

Minimize Risks

3. Procurement from Commercial Institutions

Relaxed Criteria for Loan and Investment forPublic Service Sectors

Loan in Local Currency