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 Quezon
City---The Local Water Utilities Administration (LWUA) has opened
a special credit facility for water districts needing funds for
the preparation of water supply project engineering studies and
design that would meet the standards and requirements of traditional
aid agencies and/or lending institutions for project financing
and implementation.
This was
announced recently by LWUA Administrator Orlando C. Hondrade who
said that the said special credit facility will also cater to
water districts needing funds for the implementation of water
supply projects designed to improve their efficiency and financial
viability by addressing specific system and/or operational deficiencies
such as high non-revenue water (NRW), high operations and maintenance
cost, poor water quality and low market coverage and reach.
Known as
Project Development and Efficiency Improvement Fund (PDEIF), the
creation of the special credit facility has been supported by
a P300 Million seed capital provided by the national government
by way of the Department of Finance (DOF) and the Department of
Budget and Management (DBM) through the strong backing and endorsement
of DOF Undersecretary Jeremias N. Paul.
 Hondrade
said the PDEIF will be provided to borrower water districts at
subsidized interest rates of 6.56 to 8.7 percent, depending on
the type of loan. For project development loan, interest is 6.56
percent payable up to five years, inclusive of maximum two years
grace period, with no equity requirement. For efficiency improvement
loans, interest will be between 8.2 to 8.7 percent interests,
payable up to five years for loans up to P10 million, and up to
10 years for loans above P10 million, principal repayments to
begin one year after last loan drawdown. Unlike, the project development
loan, water districts are required to put up at least 10 percent
equity counterpart for efficiency improvement loans.
Efficiency
Improvement loans may be used for NRW reduction, revenue enhancement,
cost-reduction, capacity-building and studies related to the said
programs of water districts, according to Wilfredo Feleo, LWUA
deputy administrator for finance.
All classified credit-worthy water districts are eligible to apply
for the project development loan without maximum loanable amount
on a first-come, first serve basis, subject to 20 percent cap
and compliance to LWUA's underwriting criteria. For efficiency
improvement loans, so-classified as pre-credit worthy and semi-credit
worthy water districts are eligible to apply subject to the same
prioritization criteria, with single borrower limit of P30 million
allocated as follows: P20 million for NRW reduction and P10 million
for other qualified purposes. Additional loans may be allowed
upon repayment of at least 50 percent of loan.
c
July 1, 2008
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