Makati—(PHStocks)—West Zone concessionaire Maynilad Water Services Inc. (Maynilad) recently signed a PhP10.8-billion loan agreement with Japan International Cooperation Agency (JICA) and three of Japan’s largest private commercial banks—namely, The Bank of Tokyo-Mitsubishi UFJ (BTMU), Mizuho Bank Ltd (Mizuho), and Sumitomo Mitsui Banking Corp. (SMBC)—to fund its Non-Revenue Water (NRW) and water expansion capital expenditure projects for the next four years. Aside from improving operational and network efficiency, the Capex programs will allow Maynilad to meet its service obligations and achieve sustainable growth.
The credit agreement with JICA will be denominated both in Japanese Yen and Philippine Peso, the local currency portion which will reduce Maynilad’s foreign exchange risk. This is the first time that JICA lends directly to a private corporation in the Philippines and to the water sector.
The loan will be comprised of three facilities: (1) JPY facility and (2) PhP facility (collectively PhP7.2 billion) from JICA, which will be used to finance up to 70 percent of Maynilad’s NRW-related Capex projects from 2017 to 2020; and (3) JPY facility (PhP3.6 billion) from the Japanese commerical banks, which will be used to fund Maynilad Capex for water expansion and other support projects from 2017 to 2019.
The agreement was recently signed in Tokyo, Japan, by JICA President Dr. Shinichi Kitaoka, Maynilad President and CEO Ramoncito S. Fernandez, and Maynilad Chief Operating Officer Randolph T. Estrellado. Also present during the signing were Teiji Teramoto (Managing Executive Officer, Global Corporate Unit of Bank of Tokyo Mitsubishi UFJ) and Yasushi Itagaki (Managing Executive Officer, Global Business Unit of Mizuho Bank).
Through the PhP10.8-billion loan, Maynilad can pursue Capex projects that are expected to benefit some five million people and generate over 8,700 local jobs in engineering and construction.
Fernandez thanked JICA for recognizing Maynilad’s credit worthiness and ability to execute large-scale projects. “With this loan, we are in a better position not only to improve and expand water coverage in the West Zone, but also to ensure long-term water security for future generations,” he said.
Maynilad is owned and managed by Maynilad Water Holdings Company Inc., a joint venture between Metro Pacific Investments Corp. (PSE: MPI), DMCI Holdings Inc. (PSE: DMC), and Marubeni Corp. (TYO: 8002).
Maynilad is the largest private water concessionaire in the Philippines in terms of customer base. It is the agent and contractor of the MWSS for the West Zone of the Greater Manila Area, which is composed of the cities of Manila (certain portions), Quezon City (certain portions), Makati (west of South Super Highway), Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite Province.