A water supply project planned for an industrial park in southern Vietnam will enlist the Kobe Municipal Government, which will take a stake in a company set up by Kobelco Eco-Solutions Co. and local entities.

Two affiliated organizations of Kobe will be putting up around ¥9 million in capital for the company, which will operate a reservoir, water treatment and supply facilities in Long An Province, a Kobe official said Wednesday.

Staff will also be sent from the organizations to give operational advice.

"We will be the first municipality in Japan in helping manage a water business including infrastructure development in an emerging country in cooperation with private-sector companies," the official said.

Vietnam is experiencing such problems as the depletion of groundwater while industrial demand for water is growing rapidly along with the nation's economic growth.

The project is being financed by the Japan International Cooperation Agency. JICA is providing around 70 percent of the operational funds in the form of loans through a local bank.