ADB approves $60-M loan to LWUA

Manila-based multilateral lender Asian Development Bank will lend state-run Local Water Utilities Administration (LWUA) $60 million or more than P2.8 billion to ensure sufficient clean water supply in areas outside Metro Manila.

In a statement issued on Monday, the ADB said the loan would be spent by LWUA to support provincial water districts in initiatives aimed at improving water and sanitation assets to reduce pollution and ultimately bring down incidents of water-borne diseases.

“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,” said Stella Tansengco-Schapero, senior finance specialist at the ADB’s Southeast Asia department.

The ADB said LWUA’s six-year project would be completed in April 2022, with counterpart funding from the Philippine government,

“ADB will also administer co-financing grants totaling $3 million (about P140 million) from the urban environmental infrastructure fund, financed by the government of Sweden, and the multidonor water financing partnership facility, which will provide subsidies for sanitation facilities and capacity building support for LWUA, water districts and local governments,” it added.

Tansengco-Schapero noted that “while Metro Manila 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.”

“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 ADB pointed out.

In this regard, its loan to LWUA will provide not only long-term financial but also technical assistance to small province-based water districts so they can expand their coverage, strengthen management as well as slash nonrevenue water levels, the lender said.

To date, the ADB has provided LWUA with loans for six investment projects on top of funding for five technical assistance projects.