Manila Water Company operates a 25-year concession for water and wastewater services in metro Manila’s East Zone, a 1,400 square kilometer area that is home to over 6 million people.
The government of the Philippines decided to privatize Manila’s water system in 1997 to address uneven access to piped water and sanitation systems in the capital. IFC advisory services acted as lead advisor for the privatization, designing the operating agreement and overseeing the bidding process for the concessionaire.
Six years later, after a due diligence process to ensure no conflict of interest following the advisory engagement, IFC investment services provided a $30 million loan to Manila Water Company in 2003, followed by a $30 million loan and $15 million equity investment in 2004. The company was listed on the Philippine Stock Exchange in 2005.
Over the past two decades, Manila Water Company has significantly improved the quality of water and sanitation services in the east Manila area with $1.5 billion of investments including the laying of more than 4,000 km of water pipes. These investments extended the reach of water coverage to 99 percent of the population, up from 26% before services were privatized. Many of the people not previously connected to water services were poor families who were paying local water sellers $3 per cubic meter of water. Today the average tariff in Manila is $1.30, and the poorest residents pay a lower, subsidized rate.