Washington, DC, April 15, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement with the Manila Water Company, Inc. to provide a $30 million loan. Funding will support medium to long-term development of new water sources, expansion of service, and other improvements to water supply and wastewater facilities. Additional investment will contribute in part to expansion of MCWI’s services to lower income residents through innovative arrangements for connection and payment.
MWCI won a competitive tender in 1997 to operate the Metro Manila East service area with a population of over four million through a 25-year concession agreement. It inherited facilities that require significant rehabilitation. MWCI has already invested over $120 million in major infrastructure projects. This includes its own capital expenditures and projects funded through multilateral loans to Metropolitan Waterworks and Sewerage System, the supervising government authority. MWCI oversees these programs funded by multilateral banks and repays MWSS debt through revenues from water services.
“MWCI has significantly improved the quality and efficiency of service, especially to new customers in low-income areas. It is providing them with safe, reliable and affordable water. Extending long-term finance appropriate to this utility allows IFC to support the next phase of growth,” said Declan Duff, IFC director of Infrastructure. MWCI increased water supply coverage from 70 percent of the population in its concession area to 89 percent as of December 31, 2002. Since 1997, the percentage of areas with 24-hour access to water has more than tripled to 84 percent. Among other achievements, MWCI has made new connections serving over one million people, more than half low-income and living in informal settler communities.
Including IFC’s support, MCWI has raised a $115 million package of loans through international and Philippine banks. “The financing affirms the company’s ability to secure funds required for its capital investment program despite challenging market conditions,” said Antonino Aquino, president of MCWI. The bulk of the $115 million financing will be used for MWCI’s capital expenditure requirements over the next three years. MWCI is owned by Ayala Corporation, United Utilities B.V., International Water (MWC) S.a.r.l, BPI Capital Corporation, Mitsubishi Corporation, and MWCI’s employees.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
