Manila Water Company (MWCI) 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. Manila Water was established in 1997 following the privatization of the floundering state-owned and operated Metropolitan Waterworks and Sewerage Systems. Manila Water was established by the consortium that won an internationally competitive tender with the lowest tariff bid of 2.32 per cubic liter, or 73.6 percent below the prevailing rate.
Today, the Ayala Group in the Philippines holds a 48.8 percent stake in the company, followed by the IFC with 2.42 percent and Mitsubishi Corporation with 1.2 percent stakes. The remaining 47.58 percent stake is owned by MWCI employees or the public.
IFC & Manila Water Company
IFC acted as lead advisor for the privatization of Manila’s water system, designing the operating agreement and overseeing the bidding process for the concessionaire. IFC provided Manila Water with a $30 million loan in 2003, a $15 million equity investment in 2004, and a $30 million loan in 2004. In 2013, IFC increased its commitment to MWCI by providing a $100 million term loan to help finance the company’s capital expenditure program.
Manila Water Company became profitable two years after privatization and continued to expand, leading to its IFC-supported initial public offering and listing on the Philippine Stock Exchange in 2005.
Access Manila Water has increased water access to 99 percent of the population it covers, up from 58 percent coverage 15 years ago. This service expansion has had notable development impact, reaching previously underserved poor neighborhoods in urban and peri-urban areas.
Quality The overall quality and availability of the water supply has been supported through pipeline extensions and an upgrade in the piping network. This has led to a positive health impact, with cases of diarrhea dropping from 15 cases per 1,000 people to four in 10 years.
Revenue & Pricing Lost revenue from leakages and poor billing practices has declined to 11 percent from 63 percent. On an inflation-adjusted basis tariffs in areas covered by Manila Water declined between 1997 and 2002 and rose less than they would have under the government scheme managing the system prior to privatization.
By the Numbers
$175 million in investments, equity and loans
6.2 million people served
99% of customers have 24-hour water availability
4,156 kilometers of pipeline laid
51% reduction in diarrhea cases between 1997 and 2008