Philippines Water Revolving Fund (WRF)

Project Summary

The Clean Water for People Initiative is a partnership of the Governments of the United States of America and Japan to help selected countries achieve their targets for water supply and sanitation under the Millennium Development Goals.  Under this program, USAID and JBIC have committed to establishing the Philippine Water Revolving Fund (PWRF) to promote investment in water and sanitation in order to help achieve the following goals:

  • Attract private sector investment in water and sanitation infrastructure projects, thereby enabling the Philippines to meet its MDG commitments;
  • Strengthen the capacity of key institutions in the water and finance sectors – chiefly water utilities– to effectively obtain and utilize funds for infrastructure investments;
  • Improve access to safe drinking water and sanitation, and;
  • Help reduce morbidity and mortality from waterborne diseases, and contribute to biodiversity conservation, particularly in coastal areas.

TCGI is providing long term and Manila-based, technical assistance for the institutional development of the PWRF.   This includes:

  • assisting implementing entities to establish the PWRF, including preparing documentation for approval of the PWRF and the JBIC loan by the government of the Philippines  Investment Coordination Committee;
  • advising on the structure of the Municipal Development Finance Office (MDFO) stand-by credit line;
  • preparing documentation for a Development Credit Authority (DCA) guarantee to the Local Government Unit Guarantee Corporation (LGUGC);
  • assisting the Development Bank of the Philippines (DBP) to operational the PWRF, including preparing operating guidelines and advising on the business plan and marketing strategy;
  • providing institutional support to the PWRF, including facilitating DBP project appraisals, drafting guidelines for the MDFO stand-by credit line, facilitating credit screening and credit rating for projects, and training participating bank staff and LGUGC on appraisal of water and sanitation projects and the use of the PWRF facilities;
  • conducting study tours to India and the United States to improve executing agencies’ understanding of the operation of revolving funds and pooled financing facilities, and;
  • providing technical assistance and training to DBP to implement the PWRF business plan, reviewing and revising operating guidelines, and implementing the lending program including DCA guaranties and pooled financing operations.

TCGI also assists in water and sanitation project preparation for the PWRF.  In particular, we advise utilities on the financial analysis of projects for PWRF funding, and assist potential borrowers to improve the financial viability and creditworthiness of their projects through improved management practices.

In order to facilitate water and finance sector strengthening, TCGI is helping to establish a policy requiring credit ratings for all water utilities seeking loans from any source for water and sanitation infrastructure.  We are also assisting in the strengthening of financial sector capacity to invest in the water and sanitation sector, including the mobilization of additional local capital by scrutinizing the PWRF loan portfolio and the issuance of PWRF bonds.  Finally, we are advising on the strategy and mechanisms for using small grants to improve the program’s impact on reaching the poor with community-led water and sanitation infrastructure.