Laguna Water inks P1.33-B loan

MANILA, Philippines - Manila Water Company Inc. subsidiary Laguna Water Corporation has signed a P1.33 billion omnibus loan and security agreement with the Development Bank of the Philippines (DBP) to finance the modernization of its facilities and expansion of its water network.

The loan was secured under the DBP’s Philippine Water Revolving Fund, a collaborative effort between the Philippine government, United States Agency for International Development (USAID) and the Japan International Cooperation Agency (JICA) to address the need for efficient and sustainable water supply in the Philippines in line with meeting the Millenium Development Goals (MDG).

In April, Laguna Water signed a P500 million term loan with DBP with the option  to increase the term loan to P1.33 billion.

The P1.33 billion loan would be disbursed into two tranches: P500 million which would be released this year and the second tranche of P833 million would be released by 2014.

Laguna Water general manager and chief operating officer Melvin Tan said the infusion would enable the concessionaire to achieve universal coverage in the cities of Binan and Sta Rosa and more than 50 percent coverage in Cabuyao by 2016.

The company currently covers over 30 percent of its concession area, equivalent to 45,000 individual connections for a population of 900,000.

Laguna Water would also develop new water sources beginning this year as part of its program to expand its coverage in its concession area to 80 percent by 2016.

By 2020, the company aims to achieve a 100 percent coverage in its service area which is equivalent to roughly 112,000 connections.

The company would spend P3.7 billion in four years to carry out  the expansion of its service network, financing for which would come from a combination of loans and internal funds.

Tan earlier said the company has a pending application with the National Water Resources Board (NWRB) for a higher water rights volume from the Matang Tubig Spring in the province from which it obtains five million liters of water per day.

He said the company is asking the NWRB to allow it to source up to 40 million liters of water per day from the spring water source.