Quezon City---The Local Water Utilities Administration (LWUA) and the Local Government Unit Guarantee Corporation (LGUGC) have recently entered into a memorandum of agreement that will address the need particularly of the small water districts in the country for affordable and longer term financing for their water supply and sanitation improvement projects.

LWUA Administrator Orlando C. Hondrade and LGUGC President/CEO Lydia N. Orial signed the MOA with LWUA acting Deputy Administrator for Finance Wilfredo Feleo and LGUGC operations department head Thelma Sansales as witnesses in a simple ceremony at the LWUA office in Balara, Quezon City.

The main objective of the MOA is to provide safe water supply and sanitation systems to water districts in the country through co-financing of LWUA and LGUGC-accredited financial institutions, the latter to be partially guaranteed by LGUGC subject to its single borrower limit. The LWUA-LGUGC collaboration is in support of President Arroyo's Executive Order No. 279 that seeks to graduate the credit-worthy water districts from LWUA's financial assistance program to the formal financial sector.

LWUA is the specialized lending institution mandated by law to promote and oversee the development of provincial water supply and sewerage systems through the provision of financial, institutional development, regulatory and technical assistance to duly-established water districts. The LGUGC, on the other hand, is a private financial guarantee corporation owned by the Bankers Association of the Philippines (BAP), the development Bank of the Philippines (DBP) and the Asian Development Bank (ADB) whose objective is to facilitate private financial institutions(PFIs) access to local government units and water districts, among others, through provision of guarantee.

LWUA and LGUGC in pursuit of their development mandates have resolved to support water district financing by leveraging on LWUA funds and mobilizing private financial resources which are expected to augment LWUA's limited fund to meet the current investment requirements of water districts.

" We thank our partner, LWUA, for giving this opportunity to LGUGC to demonstrate once again its catalytic role in bridging the gap between the country;s eligible water districts and the private sector financial institutions", LGUGC president Orial said, adding that LGUGC shall pursue with vigor the objectives of the MOA to ensure its success.

LWUA Administrator Hondrade meanwhile said that the MOA will give the provincial water supply sector a needed shot in the arm in view of the government's limited funding resources and LWUA's own pending bid for increase in its authorized capitalization and borrowing capacities.
c August 1 , 2007