Ayala Corporation is the largest shareholder with direct and indirect equity interests totaling 52.7%, including 39.9% direct ownership, 8% through MWC Holdings (a special purpose vehicle) and 4.8% through BPI Capital. Ayala Corporation is one of the oldest business conglomerates in the Philippines with operations in real estate, electronics, utilities, the automotive sector, banking, insurance, telecommunications, transportation, and food. United Utilities (UU) holds an 18.6% equity interest in MWCI through a subsidiary. UU, a listed UK company, provides water, sewer, energy and electricity services to over 28 million people worldwide. Bank of the Philippine Islands Capital Corporation and Mitsubishi Corporation each own a 10.7% equity interest. Employees own 6.8% of the equity through an employee stock ownership program.

MWCI’s capital investment program, including concession fees, for 2004-2007 is estimated at $292 million. The proposed IFC investment comprises a $30 million A loan for IFC''s own account and an equity subscription of up to $15 million.

45.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity	15.0

* These investment figures are indicative

MWCI’s operations cover Metro Manila East. The East zone comprises Pasig City, Pateros, San Juan, Taguig, Mandaluyong, a small part of old Manila, most of Makati, Marikina, Quezon City, Rodriguez and San Mateo in Rizal and all of the Rizal municipalities.

The project will assist MWCI to attain the targets set out under its concession agreement, including provision of water and sewerage and sanitation services to the general population in its concession area. By expanding the provision of reliable and affordable services, the project will bring direct benefits to consumers due to improved health and living standards. The project will have a particularly beneficial impact for poorer communities, where, under its “Water for the Poor Communities” program, MWCI is providing lower income households with access to piped water at an affordable rate. The program has already benefited some 107,000 poor households since its inception in 1997, and it will be substantially expanded during 2004-2007 to connect many more poor households.

MWCI stands out as one of a limited number of successful privatizations in the water and sanitation sector in emerging markets. The company has made particularly good inroads into poorer areas of its concession area. IFC''s assistance to MWCI builds upon the earlier IFC privatization advisory work by supporting a concessionaire who has demonstrated the efficiencies and client responsiveness that a private sector provider can introduce to the provision of public services. In addition to extending financing to MWCI, IFC supporting MWCI’s efforts to strengthen corporate governance and enhance its sustainability programs.

This is a category B project according to IFC''s environmental and social review procedure. Environmental and social issues associated with this project include: raw water resource use and management; potable water treatment technology and finished water quality; wastewater management and water quality impacts; sludge management; hazardous materials management and emergency response; employee health and safety; land acquisition and resettlement; affordability and willingness to pay; community development; and environment management systems.

MWC continues to demonstrate that the proposed project substantially complies with applicable Philippine laws and regulations and World Bank requirements. The company also continues to make progress on implementing the agreed Environmental and Social Action Plan. Appropriate internal policies and procedures are being followed, and a number of new initiatives that demonstrate environmental and social responsibility are being developed.
Location of environmental documents In locally affected community
Copies of the environmental documents are available at Manila Water Company Main Office. See address in next section.