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Amazon says it’s going "water positive" — but there’s a problem

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Friday, September 6, 2024

Earlier this year, the e-commerce corporation Amazon secured approval to open two new data centers in Santiago, Chile. The $400 million venture is the company’s first foray into locating its data facilities, which guzzle massive amounts of electricity and water in order to power cloud computing services and online programs, in Latin America — and in one of the most water-stressed countries in the world, where residents have protested against the industry’s expansion. This week, the tech giant made a separate but related announcement. It plans to invest in water conservation along the Maipo River, which is the primary source of water for the Santiago region. Amazon will partner with a water technology startup to help farmers along the river install drip irrigation systems on 165 acres of farmland. The plan is poised to conserve enough water to supply around 300 homes per year, and it’s part of Amazon’s campaign to make its cloud computing operations “water positive” by 2030, meaning the company’s web services division will conserve or replenish more water than it uses up. The reasoning behind this water initiative is clear: Data centers require large amounts of water to cool their servers, and Amazon plans to spend $100 billion to build more of them over the next decade as part of a big bet on its Amazon Web Services cloud-computing platform. Other tech companies such as Microsoft and Meta, which are also investing in data centers to sustain the artificial-intelligence boom, have made similar water pledges amid a growing controversy about the sector’s thirst for water and power. Amazon claims that its data centers are already among the most water-efficient in the industry, and it plans to roll out more conservation projects to mitigate its thirst. However, just like corporate pledges to reach “net-zero” emissions, these water pledges are more complex than they seem at first glance. While the company has indeed taken steps to cut water usage at its facilities, its calculations don’t account for the massive water needs of the power plants that keep the lights on at those very same facilities. Without a larger commitment to mitigating Amazon’s underlying stress on electricity grids, conservation efforts by the company and its fellow tech giants will only tackle part of the problem, according to experts who spoke to Grist. The powerful servers in large data centers run hot as they process unprecedented amounts of information, and keeping them from overheating requires both water and electricity. Rather than try to keep these rooms cool with traditional air-conditioning units, many companies use water as a coolant, running it past the servers to chill them out. The centers also need huge amounts of electricity to run all their servers: They already account for around 3 percent of U.S. power demand, a number that could more than double by 2030. On top of that, the coal, gas, and nuclear power plants that produce that electricity themselves consume even larger quantities of water to stay cool. Will Hewes, who leads water sustainability for Amazon Web Services, told Grist that the company uses water in its data centers in order to save on energy-intensive air conditioning units, thus reducing its reliance on fossil fuels.  “Using water for cooling in most places really reduces the amount of energy that we use, and so it helps us meet other sustainability goals,” he said. “We could always decide to not use water for cooling, but we want to, a lot, because of those energy and efficiency benefits.” It’s almost certain that this number has ballooned even higher in recent years as companies have built more centers to keep up with the artificial-intelligence boom. In order to save on energy costs, the company’s data centers have to evaporate millions of gallons of water per year. It’s hard to say for sure how much water the data center industry consumes, but the ballpark estimates are substantial. One 2021 study found that U.S. data centers consumed around 415,000 acre-feet of water in 2018, even before the artificial-intelligence boom. That’s enough to supply around a million average homes annually, or about as much as California’s Imperial Valley takes from the Colorado River each year to grow winter vegetables. Another study found that data centers operated by Microsoft, Google, and Meta withdrew twice as much water from rivers and aquifers as the entire country of Denmark.  It’s almost certain that this number has ballooned even higher in recent years as companies have built more centers to keep up with the artificial-intelligence boom, since AI programs such as ChatGPT require massive amounts of server real estate. Tech companies have built hundreds of new data centers in the last few years alone, and they are planning hundreds more. One recent estimate found that ChatGPT requires an average-sized bottle of water for every 10 to 50 chat responses it provides. The on-site water consumption at any one of these companies’ data centers could now rival that of a major beverage company such as PepsiCo.  Amazon doesn’t provide statistics on its absolute water consumption; Hewes told Grist the company is “focused on efficiency.” However, the tech giant’s water usage is likely lower than some of its competitors — in part because the company has built most of its data centers with so-called evaporative cooling systems, which require far less water than other cooling technologies and only turn on when temperatures get too high. The company pegs its water usage at around 10 percent of the industry average, and in temperate locations such as Sweden, it doesn’t use any water to cool down data centers except during peak summer temperatures.  Companies can reduce the environmental impact of their AI business by building them in temperate regions that have plenty of water, but they must balance those efficiency concerns with concerns about land and electricity costs, as well as the need to be close to major customers. Recent studies have found that data center water consumption in the U.S. is “skewed toward water stressed subbasins” in places like the Southwest, but Amazon has clustered much of its business farther east, especially in Virginia, which boasts cheap power and financial incentives for tech firms. “A lot of the locations are driven by customer needs, but also by [prices for] real estate and power,” said Hewes. “Some big portions of our data center footprint are in places that aren’t super hot, that aren’t in super water stressed regions. Virginia, Ohio — they get hot in the summer, but then there are big chunks of the year where we don’t need to use water for cooling.”  Even so, the company’s expansion in Virginia is already causing concerns over water availability. To mitigate its impacts in such basins, the company also funds dozens of conservation and recharge projects like the one in Chile. It donates recycled water from its data centers to farmers, who use it to irrigate their crops, and it has also helped restore the rivers that supply water-stressed cities such as Cape Town, South Africa; in northern Virginia, it has worked to install cover crop farmland that can reduce runoff pollution in local waterways. The company treats these projects the way other companies treat carbon offsets, counting each gallon recharged against a gallon it consumes at its data centers. Amazon said in its most recent sustainability report that it is 41 percent of the way to meeting its goal of being “water positive.” In other words, it has funded projects that recharge or conserve a little over 4 gallons of water for every 10 gallons of water it uses.  But despite all this, the company’s water stewardship goal doesn’t include the water consumed by the power plants that supply its data centers. This consumption can be as much as three to 10 times as large as the on-site water consumption at a data center, according to Shaolei Ren, a professor of engineering at the University of California, Riverside, who studies data center water usage. As an example, Ren pointed to an Amazon data center in Pennsylvania that relies on a nuclear power plant less than a mile away. That data center uses around 20 percent of the power plant’s capacity. “They say they’re using very little water, but there’s a big water evaporation happening just nearby, and that’s for powering their data center,” he said. Companies like Amazon can reduce this secondary water usage by relying on renewable energy sources, which don’t require anywhere near as much water as traditional power plants. Hewes says the company has been trying to “manage down” both water and energy needs through a separate goal of operating on 100 percent renewable energy, but Ren points out that the company’s data centers need round-the-clock power, which means intermittently available renewables like solar and wind farms can only go so far. Amazon isn’t the only company dealing with this problem. CyrusOne, another major data center firm, revealed in its sustainability report earlier this year that it used more than eight times as much water to source power as it did on-site at its data centers. “As long as we are reliant on grid electricity that includes thermoelectric sources to power our facilities, we are indirectly responsible for the consumption of large amounts of water in the production of that electricity,” the report said. As for replenishment projects like the one in Chile, they too will only go part of the way toward reducing the impact of the data center explosion. Even if Amazon’s cloud operations are “water positive” on a global scale, with projects in many of the same basins where it owns data centers, that doesn’t mean it won’t still compromise water access in specific watersheds. The company’s data centers and their power plants may still withdraw more water than the company replenishes in a given area, and replenishment projects in other aquifers around the world won’t address the physical consequences of that specific overdraft. “If they are able to capture some of the growing water and clean it and return to the community, that’s better than nothing, but I think it’s not really reducing the actual consumption,” Ren said. “It masks out a lot of real problems, because water is a really regional issue.” Correction: This story has been corrected to clarify that Amazon’s “water positive” pledge applies only to its web services division. This article originally appeared in Grist at https://grist.org/technology/amazon-data-centers-water-positive-energy/. Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org Read more about environmental impacts

The company’s pledge to conserve water at its data centers doesn’t account for thirsty power plants they rely on

Earlier this year, the e-commerce corporation Amazon secured approval to open two new data centers in Santiago, Chile. The $400 million venture is the company’s first foray into locating its data facilities, which guzzle massive amounts of electricity and water in order to power cloud computing services and online programs, in Latin America — and in one of the most water-stressed countries in the world, where residents have protested against the industry’s expansion.

This week, the tech giant made a separate but related announcement. It plans to invest in water conservation along the Maipo River, which is the primary source of water for the Santiago region. Amazon will partner with a water technology startup to help farmers along the river install drip irrigation systems on 165 acres of farmland. The plan is poised to conserve enough water to supply around 300 homes per year, and it’s part of Amazon’s campaign to make its cloud computing operations “water positive” by 2030, meaning the company’s web services division will conserve or replenish more water than it uses up.

The reasoning behind this water initiative is clear: Data centers require large amounts of water to cool their servers, and Amazon plans to spend $100 billion to build more of them over the next decade as part of a big bet on its Amazon Web Services cloud-computing platform. Other tech companies such as Microsoft and Meta, which are also investing in data centers to sustain the artificial-intelligence boom, have made similar water pledges amid a growing controversy about the sector’s thirst for water and power.

Amazon claims that its data centers are already among the most water-efficient in the industry, and it plans to roll out more conservation projects to mitigate its thirst. However, just like corporate pledges to reach “net-zero” emissions, these water pledges are more complex than they seem at first glance. While the company has indeed taken steps to cut water usage at its facilities, its calculations don’t account for the massive water needs of the power plants that keep the lights on at those very same facilities. Without a larger commitment to mitigating Amazon’s underlying stress on electricity grids, conservation efforts by the company and its fellow tech giants will only tackle part of the problem, according to experts who spoke to Grist.

The powerful servers in large data centers run hot as they process unprecedented amounts of information, and keeping them from overheating requires both water and electricity. Rather than try to keep these rooms cool with traditional air-conditioning units, many companies use water as a coolant, running it past the servers to chill them out. The centers also need huge amounts of electricity to run all their servers: They already account for around 3 percent of U.S. power demand, a number that could more than double by 2030. On top of that, the coal, gas, and nuclear power plants that produce that electricity themselves consume even larger quantities of water to stay cool.

Will Hewes, who leads water sustainability for Amazon Web Services, told Grist that the company uses water in its data centers in order to save on energy-intensive air conditioning units, thus reducing its reliance on fossil fuels. 

“Using water for cooling in most places really reduces the amount of energy that we use, and so it helps us meet other sustainability goals,” he said. “We could always decide to not use water for cooling, but we want to, a lot, because of those energy and efficiency benefits.”

It’s almost certain that this number has ballooned even higher in recent years as companies have built more centers to keep up with the artificial-intelligence boom.

In order to save on energy costs, the company’s data centers have to evaporate millions of gallons of water per year. It’s hard to say for sure how much water the data center industry consumes, but the ballpark estimates are substantial. One 2021 study found that U.S. data centers consumed around 415,000 acre-feet of water in 2018, even before the artificial-intelligence boom. That’s enough to supply around a million average homes annually, or about as much as California’s Imperial Valley takes from the Colorado River each year to grow winter vegetables. Another study found that data centers operated by Microsoft, Google, and Meta withdrew twice as much water from rivers and aquifers as the entire country of Denmark. 

It’s almost certain that this number has ballooned even higher in recent years as companies have built more centers to keep up with the artificial-intelligence boom, since AI programs such as ChatGPT require massive amounts of server real estate. Tech companies have built hundreds of new data centers in the last few years alone, and they are planning hundreds more. One recent estimate found that ChatGPT requires an average-sized bottle of water for every 10 to 50 chat responses it provides. The on-site water consumption at any one of these companies’ data centers could now rival that of a major beverage company such as PepsiCo. 

Amazon doesn’t provide statistics on its absolute water consumption; Hewes told Grist the company is “focused on efficiency.” However, the tech giant’s water usage is likely lower than some of its competitors — in part because the company has built most of its data centers with so-called evaporative cooling systems, which require far less water than other cooling technologies and only turn on when temperatures get too high. The company pegs its water usage at around 10 percent of the industry average, and in temperate locations such as Sweden, it doesn’t use any water to cool down data centers except during peak summer temperatures. 

Companies can reduce the environmental impact of their AI business by building them in temperate regions that have plenty of water, but they must balance those efficiency concerns with concerns about land and electricity costs, as well as the need to be close to major customers. Recent studies have found that data center water consumption in the U.S. is “skewed toward water stressed subbasins” in places like the Southwest, but Amazon has clustered much of its business farther east, especially in Virginia, which boasts cheap power and financial incentives for tech firms.

“A lot of the locations are driven by customer needs, but also by [prices for] real estate and power,” said Hewes. “Some big portions of our data center footprint are in places that aren’t super hot, that aren’t in super water stressed regions. Virginia, Ohio — they get hot in the summer, but then there are big chunks of the year where we don’t need to use water for cooling.”  Even so, the company’s expansion in Virginia is already causing concerns over water availability.

To mitigate its impacts in such basins, the company also funds dozens of conservation and recharge projects like the one in Chile. It donates recycled water from its data centers to farmers, who use it to irrigate their crops, and it has also helped restore the rivers that supply water-stressed cities such as Cape Town, South Africa; in northern Virginia, it has worked to install cover crop farmland that can reduce runoff pollution in local waterways. The company treats these projects the way other companies treat carbon offsets, counting each gallon recharged against a gallon it consumes at its data centers. Amazon said in its most recent sustainability report that it is 41 percent of the way to meeting its goal of being “water positive.” In other words, it has funded projects that recharge or conserve a little over 4 gallons of water for every 10 gallons of water it uses. 

But despite all this, the company’s water stewardship goal doesn’t include the water consumed by the power plants that supply its data centers. This consumption can be as much as three to 10 times as large as the on-site water consumption at a data center, according to Shaolei Ren, a professor of engineering at the University of California, Riverside, who studies data center water usage. As an example, Ren pointed to an Amazon data center in Pennsylvania that relies on a nuclear power plant less than a mile away. That data center uses around 20 percent of the power plant’s capacity.

“They say they’re using very little water, but there’s a big water evaporation happening just nearby, and that’s for powering their data center,” he said.

Companies like Amazon can reduce this secondary water usage by relying on renewable energy sources, which don’t require anywhere near as much water as traditional power plants. Hewes says the company has been trying to “manage down” both water and energy needs through a separate goal of operating on 100 percent renewable energy, but Ren points out that the company’s data centers need round-the-clock power, which means intermittently available renewables like solar and wind farms can only go so far.

Amazon isn’t the only company dealing with this problem. CyrusOne, another major data center firm, revealed in its sustainability report earlier this year that it used more than eight times as much water to source power as it did on-site at its data centers.

“As long as we are reliant on grid electricity that includes thermoelectric sources to power our facilities, we are indirectly responsible for the consumption of large amounts of water in the production of that electricity,” the report said.

As for replenishment projects like the one in Chile, they too will only go part of the way toward reducing the impact of the data center explosion. Even if Amazon’s cloud operations are “water positive” on a global scale, with projects in many of the same basins where it owns data centers, that doesn’t mean it won’t still compromise water access in specific watersheds. The company’s data centers and their power plants may still withdraw more water than the company replenishes in a given area, and replenishment projects in other aquifers around the world won’t address the physical consequences of that specific overdraft.

“If they are able to capture some of the growing water and clean it and return to the community, that’s better than nothing, but I think it’s not really reducing the actual consumption,” Ren said. “It masks out a lot of real problems, because water is a really regional issue.”

Correction: This story has been corrected to clarify that Amazon’s “water positive” pledge applies only to its web services division.

This article originally appeared in Grist at https://grist.org/technology/amazon-data-centers-water-positive-energy/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

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Scientists identify previously unknown compound in drinking water

An international team of scientists have discovered a previously unknown compound that is prevalent in U.S. drinking water, sparking concern about potential public health risks. The mystery compound is called "chloronitramide anion," which forms from the decomposition of inorganic chloramines — disinfectants used to safeguard people from diseases like typhoid and cholera, the researchers found...

An international team of scientists have discovered a previously unknown compound that is prevalent in U.S. drinking water, sparking concern about potential public health risks. The mystery compound is called "chloronitramide anion," which forms from the decomposition of inorganic chloramines — disinfectants used to safeguard people from diseases like typhoid and cholera, the researchers found in a study, published on Thursday in Science. In the United States alone, more than 113 million people, or about a third of the country's population, drink chloraminated water, or water that contains these disinfectants, according to the study authors. While the toxicity of chloronitramide anion is still unknown, the researchers expressed alarm about both its prevalence and its similarities to other problematic substances. "Its presence is expected, quite honestly, in all chlorinated drinking waters to some extent, because of the chemistry," senior author David Wahman, an environmental engineer at the Environmental Protection Agency, said during a press call prior to the article's publication. "It has similarity to other toxic molecules," Wahman added. The authors therefore emphasized an urgent need for further research to evaluate whether the chemical poses a public health risk, stressing that merely identifying the compound was a challenge. "Because this compound's so small, we couldn't really break it apart," co-author Juliana Laszakovits, a postdoctoral researcher at ETH Zurich, said in the press call. "The fragments that formed weren't able to be detected by the mass spectrometer." But by combining classic synthesis methods with advanced analytical techniques, including both high-resolution mass spectrometry and nuclear magnetic resonance spectrometry, the scientists were ultimately able to isolate and identify chloronitramide anion. They measured the compound's concentration content in a range of chloraminated U.S. water systems, detecting levels as high as about 100 micrograms per liter — surpassing most regulatory limits for other disinfection by-products, which hover between 60 and 80 micrograms per liter. The researchers also noticed that the compound was absent from water systems that use disinfectants other than chloramines. Lead author Julian Fairey, an associate professor of civil engineering at the University of Arkansas, stressed in a statement that even if the new compound is not toxic, there is much knowledge to gain from their study and future related research. “Finding it can help us understand the pathways for how other compounds are formed, including toxins," Fairey added. "If we know how something is formed, we can potentially control it.”

California water agency considers spending $141 million on Delta tunnel project

The Metropolitan Water District's board is set to vote in December on whether to spend $141.6 million for planning of the proposed Delta tunnel project.

The powerful board of Southern California’s largest urban water supplier will soon vote on whether to continue funding a large share of preliminary planning work for the state’s proposed water tunnel in the Sacramento-San Joaquin River Delta.The 38-member board of the Metropolitan Water District of Southern California is set to consider approving $141.6 million for planning and preconstruction costs at its Dec. 10 meeting.Gov. Gavin Newsom and his administration have requested additional financial support from suppliers that would eventually receive water from the project, and the MWD is being asked to cover its share of nearly half the initial costs.The district, which provides drinking water for about 19 million people in Southern California, has spent $160.8 million supporting the project since 2020, and is expected to help foot the bill as requested by the state.Newsom has said building the proposed Delta Conveyance Project is critical for California’s future. The 45-mile tunnel would transport water beneath the Delta, creating a second route to draw water from the Sacramento River into the aqueducts of the State Water Project.The state has estimated the total cost at $20.1 billion, and Newsom has said he hopes to have the project fully permitted to move forward by the time he leaves office in early 2027.Supporters and opponents of the project made their arguments to MWD board members at a meeting Monday. The discussion ranged widely from the vital role of the Delta’s water in California’s economy to potential alternative investments aimed at boosting the state’s supplies.Supporters, including leaders of business and labor groups, said they believe building the tunnel would improve water-supply reliability in the face of climate change, sea-level rise and the risks of an earthquake that could put existing infrastructure out of commission.“On the climate front, warming temperatures have put water storage capacity of the Sierra Nevada mountains in long-term decline,” said Adrian Covert, the Bay Area Council’s senior vice president of public policy.Covert said the project would be a cost-effective way for the state to adapt, and that reliable water will also figure in future efforts to address the state’s chronic housing shortage. “Our great concern is that, without action, water scarcity will emerge as a major constraint on housing production across California,” he said.For now, the MWD board will only be deciding on whether to agree to the state’s funding request for the next three years. The board is not expected to vote on whether to participate in the project until 2027.“We encourage you not to pull out, stay the course and fund the study so that we can learn whether it’s good or not to buy into for the long run,” said Tracy Hernandez, chief executive of the Los Angeles County Business Federation.She said the funding will enable the water district’s leaders to “continue shaping this project.”Hernandez said her organization views the project as an affordable way of ensuring water reliability. Other supporters cited a recent cost-benefit analysis by the state Department of Water Resources, which concluded that building the tunnel would deliver water at lower cost than investments in seawater desalination, wastewater recycling or stormwater capture.Opponents of the project have argued the state’s analysis is flawed and underestimates the costs while overestimating the benefits. They’ve called the tunnel a boondoggle that would harm the Delta and its deteriorating ecosystem, and have argued the project would saddle ratepayers with high costs.“Please, stop throwing good money after bad,” said Pat Hume, a Sacramento County supervisor and chair of a coalition of Delta counties. “If these costs are this high before the project even begins, imagine what will happen to the projected costs to actually deliver the project.”Different versions of the plan have been debated for decades — at first calling for a canal around the Delta, and later twin tunnels beneath the Delta, followed by Newsom’s current proposal for a single tunnel. Environmental groups, Indigenous tribes, fishing organizations and local agencies have filed lawsuits seeking to block the project. They have argued the state should instead invest in other approaches in the Delta, such as strengthening aging levees and restoring natural floodplains to reduce flood risks, while changing water management and improving existing infrastructure to protect the estuary’s health.“I believe there are a lot of alternative projects that could be explored and potentially delivered, in a more timely and more cost effective manner,” Hume said. Focusing instead on strengthening levees in the Delta and restoring tidal marshlands, he said, would ensure that water is “delivered to the doorstep of your existing pumps reliably.”Other critics argued that California’s efforts to address its housing affordability aren’t constrained by water but rather by other issues. They noted that tribes and environmental groups are currently challenging related state water-management decisions in the Delta, and said more legal challenges are likely. Some called for continuing to increase investments in local water supplies in Southern California to reduce reliance on imported water from the Delta and the Colorado River.“When you’re building something that creates environmental harm, environmental damage, that impacts local communities, there’s a cost to that. It impacts tribes, there’s a cost to that,” said Bruce Reznik, executive director of the group Los Angeles Waterkeeper.Pumping to supply farms and cities has contributed to the ecological degradation of the Delta, where fish populations have suffered declines in recent years. State water managers say the tunnel would enable California to capture more water during wet periods. They also say the tunnel would lessen limitations on water deliveries linked to fish protections at the state’s existing pumping facilities. Reznik said Southern California has a great deal of untapped potential to boost supplies locally through investments such as recycling wastewater and capturing stormwater. “There is so much we could be working on together,” he said.The state Department of Water Resources has asked MWD to provide about 47% of the $300 million in planning and preconstruction costs, with 17 other water agencies funding the remainder. The state’s current plans call for starting construction of the tunnel in late 2029. Construction would take about 15 years. Deven Upadhyay, MWD’s interim general manager, called Monday’s discussion a “fantastic dialogue” that allowed board members to hear from those on different sides of the debate.In a separate project, the district is also moving ahead with plans to build the largest wastewater recycling plant in the country. The facility in Carson, called Pure Water Southern California, is projected to cost $8 billion at full build-out and produce 150 million gallons of water daily — enough to supply about half a million homes.The U.S. Bureau of Reclamation announced this week that the federal government will provide $26.2 million to support the project, adding to $99.2 million in federal funds committed earlier this year. The Metropolitan Water District’s managers say the plant could start operating and delivering water in 2032.The water recycling project will benefit the entire state and the Southwest, said Adán Ortega, Jr., chair of the MWD board.“It will help lower demands on our imported water sources from the Colorado River and on the Northern Sierra,” Ortega said. “And it will help keep the economic engine of Southern California running, regardless of the future drought conditions we may face.”

Cambodia's Flagship Canal in Hot Water as China Funding Dries Up

By Francesco GuarascioPHNOM PENH (Reuters) - At a ceremony in August, Cambodia's leader Hun Manet knelt to receive blessings from saffron-robed...

PHNOM PENH (Reuters) - At a ceremony in August, Cambodia's leader Hun Manet knelt to receive blessings from saffron-robed monks as fireworks and balloons heralded the breaking of ground for a canal he hopes will transform his country's economic fortunes.Addressing hundreds of people waving the Cambodian flag, Hun Manet said China would contribute 49% to the funding of the Funan Techo Canal that will link the Mekong River to the Gulf of Thailand and reduce Cambodia's shipping reliance on its neighbour Vietnam.Cambodia's government estimates the strategic, if contentious, infrastructure project will cost $1.7 billion, nearly 4% of Cambodia's annual gross domestic product.But months later, China's financial contribution remains in doubt.Four people directly involved in the investment plans or briefed about them told Reuters Beijing has expressed misgivings about the project and has not made definitive commitments on its funding."It is normal business practice for Chinese companies to assist Cambodia in exploring the construction of comprehensive water conservancy projects in accordance with market principles," China's foreign ministry said in an emailed statement to Reuters when asked about the canal.The Chinese ministry did not answer a direct question about the funding but said the two countries were "ironclad friends," a comment echoed by Hun Manet in late October.Cambodia's government declined requests for interviews, and its press officers did not reply in recent weeks to requests for comments about the canal's funding.China's lack of clear commitment could jeopardise the entire plan, given uncertainty over the project's costs, its environmental impact and financial viability, experts, officials and diplomats say.It also underscore how Beijing is drastically downsizing its overseas investments as its domestic economic struggles, even in countries it considers strategic partners, such as Cambodia.Once a prime example for Western-backed "nation-building" after the long civil war that followed the fall of the Khmer Rouge regime, Cambodia has in recent times been widely seen by diplomats and foreign policy experts as a Chinese client state, owing to Beijing more than one-third of its total state debt.But Chinese investment in the Southeast Asian nation is now plunging, after a series of unsuccessful infrastructure projects, amid concerns over criminal gangs targeting Chinese nationals, and dropping tourist numbers.The 180km (112 mile) canal would greatly expand an existing waterway and divert water from the fragile rice-growing Mekong Delta to the Gulf of Thailand, cutting Cambodian shipping through Vietnamese ports.In the months after the Cambodian government signed an "investment framework agreement" in October 2023 with China Road and Bridge Corporation (CRBC), a state-owned construction company, Cambodian officials went public about China's financial involvement. The text of the deal is not public.In an interview with Reuters in May, the minister in charge of the project, Deputy Prime Minister Sun Chanthol, said CRBC would develop the canal and "totally" cover its costs, getting a multi-decade concession in return.But at the August groundbreaking, the prime minister put CRBC's share in the project at 49%, with the remainder covered by Cambodian companies.The same day, his father and Cambodia's decades-long leader Hun Sen posted a statement on Facebook calling on Japan to invest in the canal.China's official Xinhua News Agency did not mention any Chinese involvement in its report about the groundbreaking.A few days later, a communication officer for Sun Chanthol told Reuters that ownership for the canal's section to be developed together with CRBC remained "to be determined".When asked about Cambodian assertions that CRBC would have a 49% stake, an official for the company told Reuters in mid-October the figures circulating publicly were not definitive. "It's very complicated," said the official, who did not elaborate.CRBC and its parent company did not reply to requests for comment.One person directly involved in the investment plans told Reuters in early November there was no Chinese money on the table at that stage, confirming the account from another official.A source from one of the Cambodian investors in the project said it would not be a surprise if China did not invest in the canal at all.A fourth official briefed on the matter said China earlier this year had privately criticised Cambodian officials for announcing Chinese funding for the project that had not been decided.They all declined to be named because of the issue's sensitivity.More than three months after groundbreaking, the site of the ceremony on the bank of the Mekong laid abandoned, a Reuters reporter observed.Dithering over the canal comes as Chinese official development assistance to Cambodia, including infrastructure funding, is falling.China's disbursements to Cambodia are projected to drop to $35 million in 2026 from more than $420 million in 2021. There have been no new Chinese loans in the first half of this year, down from $567 million in 2022 and $302 million last year, according to Cambodian official data.Chinese funding for overseas projects is also falling elsewhere, but in Cambodia the impact "could be very pronounced," said Grace Stanhope of the Lowy Institute, a Sydney-based think tank.China is still building roads and other infrastructure but has pulled out from the construction of the new Phnom Penh airport, where it had initially committed $1.1 billion.That disengagement came as an expressway built by CRBC connecting Phnom Penh to the coastal city of Sihanoukville remained under-utilised by Cambodian motorists and truck drivers who to avoid tolls prefer the crowded but free old road, a Reuters reporter observed, confirming accounts from multiple Cambodia-based officials.Another recently completed Chinese-backed airport at Siem Reap to serve the UNESCO world heritage site of Angkor Wat "is very quiet," said Ou Virak, head of Cambodian think tank Future Forum, noting investors may face losses.Chinese private investment remains high, but multiple Phnom Penh-based diplomats and financial experts point to once large inflows of Chinese informal funds destined to the gambling industry and real estate sector having dried up.Chinese tourism, once a major source of income for Cambodia, has also struggled to recover from the COVID pandemic.That has coincided with a prolonged Chinese campaign warning tourists of risks linked to an online scams industry in Cambodia.As relations between China and Cambodia evolve, the canal project's fate and its sustainability remain uncertain."With so many unknowns, it's no surprise to me that investors are getting cold feet on this project and have yet to show up with their money in hand," said Brian Eyler, an expert on the Mekong region at U.S.-based think tank Stimson Center.(Reporting by Francesco Guarascio in Phnom Penh; additional reporting by Liz Lee and Yukun Zhang in Beijing; editing by David Crawshaw and Lincoln Feast.)Copyright 2024 Thomson Reuters.

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