WASHINGTON, D.C., Feb. 15 -- The International Finance Corporation (IFC) has approved an investment in its first wastewater treatment plant. This comprises loan financing of US$7 million for the construction and operation of a wastewater treatment plant, in Puerto Vallarta, Mexico. The financing will help CompaÒÌa Tratadora de Aguas Negras de Puerto Vallarta, S.A. de C.V. (CTAPV) to build and operate a municipal sewage treatment plant. CTAPV, a private sector company, will undertake this project on a build-own-operate-transfer (BOOT) basis under a fifteen-year contract with the Puerto Vallarta water authority, Sistema de los Servicios de Agua Potable, Drenaje y Alcantarillado de Puerto Vallarta, Jalisco. "This is one of the first wastewater projects undertaken by the private sector on a BOOT basis in the developing world," said Mr. Everett J. Santos, Director of IFC's Infrastructure Department. "We expect it to demonstrate the role the private sector can play in the environmental services sector, both in Mexi
co and in other countries. IFC's investment and assistance in structuring this project will help CTAPV to mobilize financing from private sector investors." The main equity investor in CTAPV is Biwater de Mexico, S.A. de C.V., which is ultimately owned by Biwater Limited of the United Kingdom. The IFC financing consists of a US$5 million senior loan and a US$2 million subordinated loan. Mexico is embarking on a major program to improve municipal wastewater treatment throughout the country, and much of the new capacity is expected to be constructed, owned, and operated by the private sector. Puerto Vallarta is one of Mexico's most important beach resorts. It has experienced rapid development since the 1960s, which has placed an increasing strain on the city's existing sewage treatment capacity. The IFC-financed plant will provide treatment capacity that conforms with Mexico's environmental guidelines as well as those of the World Bank, and will help ensure that Puerto Vallarta sustains an attractive environmen
t for its population and for its tourism industry. IFC is a member of the World Bank Group and is the largest multilateral source of loan and equity financing for private sector projects in developing countries.
