Development Bank of the Philippines (DBP) and the Bank of the Philippine Islands (BPI) are co-financing a landmark P560-million project for the rehabilitation of the existing water supply system of the Puerto Princesa City Water District.
This is the maiden agreement under the Philippine Water Revolving Fund (PWRF), a public-private participation scheme in which the DBP and a private bank jointly undertake financing of water and sanitation projects.
Francisco Del Rosario, DBP president & chief executive officer, said the loan will be used to rehabilitate Puerto Princesa City’s existing water supply system serving 23,317 households and establishments in 36 barangays.
He added that the loan will be used in expanding the services of the Puerto Princesa Water District to unserved areas of the city, and bringing its total connections to 32,776 by 2014.
The project also includes the development of new sources that combines surface water from Irawan River and new groundwater wells.
“There is a need to involve the private sector to pursue development in the countryside, as there is a huge investment requirement on water supply and sanitation,” Del Rosario said during the agreement signing.
“These water projects contribute to the initiatives being undertaken by the national government including one of the objectives of the millennium development goals which is access to safe and potable water.”
Gil Buenaventura, BPI chief operating officer, said that this is a milestone for BPI.
“Whenever we see developments like this being realized, it not only gives us a sense of accomplishment to have supported the water sector but also encourages us to continue doing so, expand and create new markets,” Buenaventura said.
Under the co-financing deal, Puerto Princesa will be getting a term loan with a repayment period of 15 years.
DBP will be tapping funds from the Japan International Cooperation Agency (JICA), while 85 percent of the BPI loan will be covered by a guarantee from the LGU Guarantee Corporation (LGUGC), a private third party guarantor and from USAID’s Development Credit Authority.
In the past, municipal water projects were mostly financed by overseas development assistance funds and subsidies from the national government.
The PWRF is an innovative scheme that aims to mobilize private capital to augment public resources for much-needed investments in water supply and sanitation.
