| THE Ayala-led Manila Water Co. signed on Wednesday a €60-million, or around $70 million, guaranteed 10-year term loan with the European Investment Bank (EIB).
The loan, which was arranged by ING Bank with the Development Bank of Singapore and Sumitomo Mitsui Banking Corp., will help fund its P30-billon capital expenditure program in the next five years.
"The loan is available in either US dollars or yen," said Manila Water in a disclosure to the stock exchange.
It said the investment bank financing will help improve the quality of water supply service in Manila's East Zone, as well as the management of existing water resources by upgrading and extending facilities and reducing losses.
Manila Water intends to finance its five-year capex through a combination of internally generated cash and loans. The loan will not only be supported by the EIB borrowings but also the over $300 million available facility that it secured last year.
"On the expansion side, we plan to provide water service to an additional one million customers in the next five years. To complement this expansion and to ensure the reliability of our water supply, the company will work with Metropolitan Waterworks and Sewerage System to develop new water sources. This will include the construction of the next major water source called the Laiban Dam in the eastern part of Rizal," said Manila Water president Antonino Aquino in an earlier interview.
This year alone, Manila Water is spending P5 billion to fund its water distribution network.
The company submitted last March a new rate rebasing plan with the regulators to detail its proposed investments in the service area over the next five years.
A rate rebasing plan is a full investment proposal that Manila Water submits every five years as part of the concession agreement. This indicates the water distributor's strategies to develop new sources, the costs that go with the development and projected revenues the company stands to earn overtime.
The new rate rebasing plan will be implemented in January 2008.
Since it won in the privatization of the east zone in 1997, Manila Water has invested a total of P23 billion on various capital investment programs within the East zone.
Manila Water is a publicly traded company at the Philippine Stock Exchange. Its major shareholders are Ayala Corp., United Utilities Pacific Holdings BV, Mitsubishi Corp., BPI Capital Corp., International Finance Corp., and Philwater Holdings Co. Inc.
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