MANILA, PHILIPPINES – The Asian Development Bank (ADB) has approved a loan of $60 million to help water service providers outside Metro Manila improve water and sanitation assets needed to cut water-borne diseases by boosting access to safe water and reducing environmental pollution.
The loan to the national government-owned specialized lender, the Local Water Utilities Administration (LWUA), will help allow it to fulfill its mandate to support water districts. ADB will also administer cofinancing grants totaling $3 million from the Urban Environmental Infrastructure Fund, financed by the Government of Sweden, and the multi-donor Water Financing Partnership Facility, which will provide subsidies for sanitation facilities and capacity building support for LWUA, water districts and local governments.
“While Metro Manila’s residents now enjoy much better piped water supply and improved sanitation, millions of those living in provincial areas are potentially exposed to water-related diseases due to persistent underinvestment in water and sanitation,” said Stella Tansengco-Schapero, Senior Finance Specialist in ADB’s Southeast Asia Department. “LWUA will on-lend the funds to water districts for water network upgrades and extensions and new sanitation systems. The project will also help raise the capacity of LWUA, water districts and other government officials to address planning, financial and management gaps.”
The supply of water and sanitation outside Manila is fragmented and suffers from weak planning, monitoring and investment. And while a number of water districts have achieved scale and sustainability and can access funding from government and private banks, most are small with relatively few connections, limited coverage, high nonrevenue water losses and low efficiency and profitability.
The assistance to LWUA will help it provide long-term loans and technical support to smaller water districts, helping to expand coverage, cut nonrevenue water levels, and to strengthen management.
ADB has worked with LWUA since the 1970s, providing it with loans for six investment projects as well as funding five technical assistance projects to finance and strengthen district water providers. The project, which will include Government of the Philippines counterpart funding, will run for about 6 years with an expected completion date of April 2022.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.