Manila Water secures P 14.5-B loan from Bank of China for capex

Manila Water Co. Inc. has signed with Bank of China group a 250-million-euro loan to fund its capex program, including investments on new water sources.

The seven-year loan facility, which is equivalent to about P14.5 billion, is extended by the Bank of China (Hong Kong) Ltd. and the Manila branch of Bank of China Ltd.

The Ayala group unit said in a regulatory filing that proceeds from the loan would be used to finance capital investment program in its main business—the East Zone concession with Metropolitan Waterworks and Sewerage System (MWSS) covering the eastern part of Metro Manila as well as Rizal province.

“Major projects include development of medium-term water sources, improvements in existing distribution systems, construction of new sewerage treatment plants, and expansion of sewer networks,” Manila Water said.

The company added that, under its MWSS-approved business plan for rate rebasing cycle for 2018-2022, it was programmed to implement capital expenditure projects amounting to a total of P79.4 billion.

Manila Water saw its net income in the first semester fall by 18 percent to P2.9 billion, mainly due to the water supply shortage that hit the East Zone starting in March.

Beyond its main business, Manila Water’s domestic operations saw higher earnings contribution while foreign operations held steady.

Consolidated revenue increased 7 percent to P10.5 billion, thanks to a bigger billed volume and higher average effective tariff in several key business units.

Manila Water said the rise in revenue was weighed down by the impact of its voluntary one-time bill waiver program that was implemented in April at a cost of P353 million.

Also, consolidated costs jumped by 22 percent to P4.5 billion, mainly due to overhead costs doubling to P1.2 billion. This was caused by the P1.13-billion penalty imposed by the MWSS.

For the MWSS concession alone, billed volume declined by 2 percent to 244.9 million cubic meters as a result of the lower water supply and service availability during the first half.