People in the Philippines needed clean water. They were willing to pay for it. But banks were unwilling to lend the money that water companies needed to upgrade equipment and extend their lines into communities that lacked running water.
This problem was solved by the Philippines Water Revolving Fund (PWRF), the first water revolving fund outside the United States and Europe. Under this program:
Creditworthy water companies borrow money from a fund created by international donors and local banks.
Guarantors bolster the banks' confidence and willingness to lend by decreasing their risk.
The PWRF support team led by DAI helped stakeholders with related business and marketing plans and transaction support, trained banks on water supply project appraisal and credit rating, and assisted utilities with project development.
Since its first loan in 2010, the fund has mobilized approximately 4 billion Philippine pesos (US$93 million) in loans for water supply and sanitation projects, of which 2.4 billion pesos (US$56 million) came from private commercial banks previously not in a position to extend funds to water companies. Two million people have new or improved access to piped water as a result.
"This is a milestone for BPI," said Gil Buenaventura, chief operating officer of the Bank of the Philippine Islands (BPI). "Whenever we see developments like this being realized, it not only gives us a sense of accomplishment to have supported the water sector but also encourages us to continue doing so, expand, and create new markets."
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