Aqualia is a wholly-owned subsidiary of Fomento de Construcciones y Contratas S.A. (“FCC”), a leading Spanish conglomerate engaged in a broad range of businesses, including infrastructure services (water and waste management, transport), construction, cement and power generation. FCC is listed on the Madrid Stock Exchange, with a 36.5% float.

Aqualia manages FCC’s global activities in the integrated water management sector, including water treatment, desalination, transport, distribution, sanitation, wastewater treatment and irrigation services. The Sponsor is primarily engaged in the management of public water services, based on long-term service contracts with over 1,100 municipalities, primarily in Spain, the Czech Republic and Italy. With an employee base of over 7,000, Aqualia currently serves around 27 million people worldwide, of which around 13 million are in Spain. In terms of number of customers served, Aqualia ranks second in Spain and fourth in the world. Aqualia Infraestructuras S.A., a wholly-owned subsidiary of Aqualia, is engaged in the design and construction of water infrastructure projects.

IFC’s proposed equity investment in the Company is for up to US$50 million. Proceeds from IFC’s subscription will contribute to funding the Company’s existing projects under construction and future projects that the Company expects to undertake. In addition to contributing capital from its own resources, the Sponsor may seek additional investor participation in Aqualia Capital.

Aqualia currently has ownership interests in projects under construction and operation in Algeria, Egypt and Mexico, which will be transferred into the Company. In Algeria, the two desalination projects are located in Mostaganem and Cap Djinet. In Egypt, the wastewater treatment plant is located in the city of New Cairo. In Mexico, the two aqueduct projects are located in the states of Queretaro and San Louis Potosi.

The Sponsor has been actively participating in and expanding its business presence in developing countries. In the context of rapidly growing demand for reliable water and wastewater treatment services in developing countries, public sector financing constraints and generally lack of quality service delivery by the public sector, private sector participation can play an important role in serving the growing demand, financing the required infrastructure expansion and rehabilitation works, and improving sector efficiency and quality of service delivery. Aqualia has significant operational experience, technological know-how and managerial competencies that it can leverage and share to contribute to the development of the water sector in its developing country target markets.

Water scarcity has become a matter of serious global concern and it has become especially pronounced in the Middle East and North Africa region, where the Sponsor is currently active. In Mexico, the Sponsor is building aqueducts to deliver water to communities which are facing growing water scarcity as nearby aquifers have been over-exploited. The Sponsor''s desalination projects in Algeria and aqueducts in Mexico are expected to serve around 2.8 million people. The Company is expected to develop new projects in the future that will help significantly expand the number of customers to whom it will deliver clean drinking water.

Rapid urbanization and industrialization in developing countries has also meant that governments need to aggressively address the issue of wastewater treatment in a sustainable manner. Projects like the Sponsor''s New Cairo wastewater treatment plant will be important in proper management of wastewater and the re-use of treated wastewater for purposes such as irrigation. By contributing to enabling increased access to clean drinking water, improving efficiency in water management and supporting best practices in wastewater management, the proposed Project will support sustainable economic development.

The provision of water and wastewater services is a corporate priority for IFC. In the proposed Project, IFC is expected to contribute as follows: (i) IFC has extensive experience and presence operating in emerging markets, and can support the Company''s entry into developing countries where the Sponsor does not have prior engagement; (ii) IFC can share its country and sector knowledge with the Sponsor to help deliver increased access to quality water in under-served regions; (iii) IFC''s long-term funding will help the Company to grow its business and mobilize additional financing, including at the underlying project level; and (iv) IFC will assist the Company in developing a robust Environmental & Social Management System which is fully compliant with the IFC Performance Standards.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The Company’s current and potential future business activities in water and wastewater treatment provide essential environmental services to the public. The Sponsor, as owner of the assets to be contributed to the Company, is generally demonstrating the ability to effectively manage potential environmental and social risks from its business activities through the application of international accepted practices to protect soil, water and air resources.