The Asian Development Bank (ADB) has loaned the Philippine government-owned Local Water Utilities Administration (LWUA) $60 million to allow to fulfill its mandate of supporting water districts.
In a statement on Monday, the Manila-based ADB said the newly approved loan “will 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.”
In addition, ADB will also administer co-financing 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 at ADB’s Southeast Asia Department.
LWUA will lend the funds to water districts for water network upgrades and extensions and new sanitation systems, she noted.
“The project will also help raise the capacity of LWUA, water districts and other government officials to address planning, financial and management gaps,” the ADB official added.
The project, which include Philippine government counterpart funding, will run for about six years with an expected completion date in April 2022.
ADB emphasized that water supply and sanitation outside Manila are fragmented and suffer from weak planning, monitoring, and investment.
Although 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, it pointed out.
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.