At least P820 million worth of loans for water districts sourced from private banks have been processed under the Philippine Water Revolving Fund (PWRF).
The fund is an innovative lending program for water supply and sanitation projects, administered by the Development Bank of the Philippines (DBP).
With a loan from the Japan International Cooperation Agency (JICA), DBP said it will leverage funds from private banks with a partial credit guarantee from the United States Agency for International Development (USAID) Development Credit Authority and the Local Government Unit Guarantee Corp. (LGUGC).
According to the DBP, $100 million worth of funds will immediately be made available for water and sanitation projects for both public and private water service providers.
PRWF aims to mobilize private capital and augment public resources for investments in water supply and sanitation projects, and bring potable water to 90 percent of the country’s population.
“It is likewise designed to leverage official development assistance (ODA) funds with private sector resources for water financing, and use of existing government funds like municipal development funds as standby credit to give confidence to private financing institutions in extending finance to the local water supply sector,” the government financial institution added.
The DBP said the fund is in response to Executive Order 279 increasing financing to the water supply and sewerage sector and water service providers.
It allows loan terms and conditions to be affordable to water service providers, and at market rates for participating financial institutions. It will likewise explore the development of other mechanisms with broader private sector participation such as loan securitization. — Ted Torres