Completed Mixed AidData Chinese Aid

China Eximbank provides $116.6 million preferential buyer's credit loan for Phase 2 of Angat Water Utilisation and Aqueduct Improvement Project

$116.6M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Philippines Metropolitan Waterworks and Sewerage System (MWSS)
Country	Philippines
Start Date	Jan 07, 2010
End Date	Feb 04, 2033
Duration	8,429 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`38255`

Grant Description

China Eximbank provides $116.6 million preferential buyer's credit loan for Phase 2 of Angat Water Utilisation and Aqueduct Improvement Project On January 7, 2010, China Eximbank and the Metropolitan Waterworks and Sewerage System (MWSS) — a government agency that is in charge of water privatization in Metro Manila in the Philippines — signed a $116.6 million preferential buyer's credit (PBC) agreement for Phase 2 of the Angat Water Utilisation and Aqueduct Improvement Project (AWUIAP).

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period5 years

💹 Interest Rate3%

The final maturity date of the PBC is January 21, 2030. Semi-annual loan repayments were scheduled to begin on January 21, 2015 and end on January 21, 2030. The loan entered into force on May 7, 2010.

The proceeds of the PBC were to be used by the borrower to finance 95% of the cost of a commercial contract between MWSSS and China International Water and Electric Company (CWE), which was signed in mid-2009.

The purpose of the project was to transport raw water from Angat Dam to the La Mesa Dam and then onward to a set of water treatment plants in La Mesa and Balara (by repairing a leaky, 15 km irrigation canal called Aqueduct No 5).

Upon completion of the project, it was expected that Rizal, Cavite, and Bulacan provinces in Quezon City would have greater access to clean water and MWSS would recover an estimated 394 million liters of water that was being lost each day because of the leaky aqueduct. CWE received a construction start order from MWSS on March 16, 2010.

Construction commenced on March 17, 2010. The EPC contract went into effect on May 9, 2010. A formal groundbreaking ceremony took place on July 28, 2010.

The project was originally scheduled to be completed in March 2013 but it was completed eight months ahead of schedule and officially inaugurated on July 17, 2012. The project was issued a temporary completion certificate on September 10, 2012. A final project completion certificate was issued on September 25, 2013.

However, this project was also a source of local controversy.

In February 2011, the Philippine Large Diameter Pressure Pipe Manufacturers Association urged the new MWSS board members appointed by President Aquino to rescind the commercial contract that was issued to CWE. It alleged that limiting the bidding among three Chinese state-owned firms violated the country’s procurement law.

The Philippine Large Diameter Pressure Pipe Manufacturers Association also said the contract price was excessive compared to the cost of the Phase 1 of the Angat Water Utilisation and Aqueduct Improvement Project, which was carried out by three of its members. The MWSS board, however, did not act on the association’s recommendation to rescind the contract.

📋 Staff Comments

The Chinese project title is Angat供水与管道改造二期工程 or 安嘎特供水项目 or 菲律宾大马尼拉供水项目.
The Government of Philippines loan identification number for the China Eximbank PBC that supported Phase 2 of the Angat Water Utilisation and Aqueduct Improvement Project is CHI-7.
The China Eximbank loan that supported this project is not included in the the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
According to CWE, it was issued a $112 million commercial contract and the China Eximbank PBC was used to finance 95% of the cost of the commercial contract. However, the Government of the Philippines reports that the face value of the PBC was $116.6 million. This issue requires further investigation.

📚 Sources & References

Noy thanks China for dam project, [安嘎特供水与管道改造二期工程（EPC）]
菲律宾总统出席供水项目仪式感谢中国支持(图)
The Challenges in Water Security Legacy Annual Report and Financial Statements 2012
AQUEDUCT CONSTRUCTION: AWUAIP Project, 2010 ODA Portfolio Review Annex 3-A List of Active ODA Loans
China loan terms for PH infra projects better under Duterte admin
Dominguez debunks misleading claims on China loans
CY 2014 ODA Portfolio Review Annex 2-C List of Active ODA Loans Covered in the Review
Philippines-China Infrastructure Cooperation: Lessons and Prospects
Consolidated Audit Report on Official Development Assistance (ODA) Projects
CY 2012 ODA Portfolio Review (List of Active Loans)
Observations_and_Recommendations
AQUEDUCT C O N S T R U C T I O N : A W U A I P P r o j e c t
NOTICE OF ANNUAL STOCKHOLDERS’ MEETING
Dominguez debunks misleading claims on China loans
CY 2010 ODA Portfolio Review Annex 3
Bridging the Infrastructure Investment Gap through Foreign Aid: A Briefer on Chinese ODA
Consolidated Audit Report on Official Development Assistance Projects
Philippine President thanks China for supporting water project
MWSS Inaugurates Angat Water Utilization and Improvement Project (AWUAIP) – Phase 2: WSL 2
Metropolitan Waterworks and Sewerage System ANNUAL REPORT
Time to say 'Thank - you' to Chinese aid, [Ministry of Commerce of the People's Republic of China] China's construction of the Angat Water Supply Project in the Philippines officially started
CY 2012 ODA Portfolio Review, [China Three Gorges Project News] Philippine Metro Manila Water Supply Project officially started
Tunnel No. 6 of the Metro Manila Water Supply Project in the Philippines is completed ahead of schedule
Construction of the Metro Manila Water Supply Project in the Philippines undertaken by Three Gorges Group commenced
The President of the Philippines Attends the Water Supply Project Ceremony
Thanking China for Financial Support
Angat aqueduct: rare success in China-funded infra projects in PH
Philippines Metro Manila Water Supply Project Receives Final Completion Certificate
China Overseas Development Finance
MWSS probes alleged overpricing in Angat project
Proposed Loan for Additional Financing Metropolitan Waterworks and Sewerage System Angat Water Transmission Improvement Project (Guaranteed by the Republic of the Philippines) Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.