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Manila Water
Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number 25321
Sector1Water and Wastewater Utilities
Environmental categoryB
Date SPI disclosedOctober 11, 2006
Projected board dateNovember 14, 2006
Previous EventsSigned: November 22, 2006
Approved: November 20, 2006
View Environmental & Social Review Summary (ESRS), click here
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Project description
Manila Water Company, Inc. (MWC or the company) is a Philippine company which provides water delivery, sewerage and sanitation services under the terms of a 25-year Concession Agreement to approximately five million people in the east part of Manila. Under the terms of the Concession Agreement entered into on February 21, 1997 with the Metropolitan Waterworks and Sewerage System (“MWSS”), MWC was granted exclusive rights to provide water and wastewater service in the so called “East Zone” as an agent and contractor of MWSS. The East Zone spans approximately 1,400 square kilometers encompassing 23 cities and municipalities.

Since taking over the East Zone concession in 1997 and as of December 31, 2005, the company invested a total of PhP 17.5 billion ($338 million) on programs focused on extending the water network, reducing system losses and improving water quality. A total of 1,274 kilometers of pipeline have been laid and MWC has more than doubled its customer base since 1997 to 708 thousand households. System losses have been brought down from 63% in 1997 to 35.5% by end-2005 helping the volume of water delivered to customers to grow from 440 million liters to 864 million liters per day. In addition, 95% of the population served now enjoys 24-hour water supply compared to only 26% in 1997.

MWC is an existing IFC client to whom the Corporation has extended a $30 million equivalent loan in Japanese Yen and committed an additional $30 million equivalent loan. IFC has also made a $15 million equivalent equity investment in the company in 2004, in preparation for an Initial Public Offering and the listing of MWC’s shares on the Philippines Stock Exchange that took place in 2005.

MWC approached IFC for a $30 million equivalent standby Loan/Guarantee facility to partially finance its capital expenditure program for the East Zone estimated at $355 million for the 2006-09 period. These expenditures will have the following components:

- Development of new raw water sources,
- Service expansion to the east and southeast areas of the concession,
- Network distribution improvements,
- Other pipe extension and improvement projects,
- Non-revenue water (NRW) reduction programs, and
- Expansion of sewerage & sanitation services.