Boracay Borrows 500 to 1 billion pesos
The Boracay venture of Manila Water Co. has secured a P500-million loan from two local banks, enabling the utility firm to service the entire Boracay island by 2014. The deal includes an option to raise the loan amount to P 1 billion.
Boracay Water is a public-private partnership between Manila Water and the Tourism Infrastructure and Enterprise Zone Authority, formerly known as the Philippine Tourism Authority.
The venture, which took over the island’s water and sewerage operations on January 1, 2010, has been able to provide water supply to 96 percent of Boracay’s population at an average water pressure of 30 pounds per square inch on a 24/7 basis.
The P500-million loan was from the Development Bank of the Philippines and Security Bank, through the Philippine Water Revolving Fund (PWRF).
Manila Water said its Boracay venture upgraded the island’s sewage treatment plant. It also claimed that the treated water released “has been safe for swimming and aquatic life.”
The PWRF is a collaboration of the national government, the United States Agency for International Development, and the Japan International Cooperation Agency.
Manila Water said the deal “is the first and the biggest loan provided by the PWRF to a private company from the water sector.”
The boracay landmark loan was signed last Friday in Manila.
Note that Boracay was able to negotiate very good rates and waived significant fees from DBP and Security Bank. Also, the loan gives financial flexibility having a payment tenor of 20 years – the longest in the industry. It has been said, that this loan is a landmark deal.
The signing strengthens Boracay Tourism commitments to ensure 100% water service coverage by 2014 and waste-water service by 2018. Both DBP and Security Bank were actually excited that they are now partners to Boracay Island’s tourism and environment sustainable development.
Must be logged in to comment – Register Now ! It’s Easy! – Boracay Blog