WASHINGTON, D.C., April 25, 2003- The
International Finance Corporation (IFC), the private sector arm of the
World Bank Group, has signed an agreement to invest up to $15 million
in Aguas de Panama, S.A. (APSA) to support private sector participation
in the water sector in Panama. The investment will help maintain
a program to supply bulk potable water to the state-owned utility, Instituto
de Acueductos y Alcantarillados Nacionales (IDAAN).
IFC’s investment consists of a loan of $ 6 million for its own account
and a syndicated loan for up to $9 million for the account of other participants.
The investment proceeds will be used to replace bridge shareholder
financing from Biwater Supply Limited, a U.K. company who provided $25
million of financing to construct the potable water plant, which is now
APSA has a 30-year concession to abstract water from Lake Gatun, treat
it and deliver an agreed daily volume of potable water, varying between
15 and 20 million gallons per day, into the existing IDAAN distribution
system at Nuevo Chorrillo, located on the West Bank of the Panama Canal.
The APSA project delivers bulk potable drinking water to the IDAAN water
distribution network that supplies approximately 270,000 residents in Arraijan,
La Chorrera and Capira, located outside of Panama City. These areas
have experienced very rapid population growth in recent years due to a
substantial amount of migration from other areas of the country, creating
a great demand for housing and the provision of basic services, such as
“IFC’s investment will help alleviate a severe water shortage in the
area and will improve the quality of life and the prosperity of the local
people,” said Declan Duff, Director of IFC’s Infrastructure Department.
Investing in water projects has been at the center of IFC’s strategy in
promoting private sector participation in the infrastructure sector. According
to World Bank studies, there is a need to double the rate of investment
in water and sanitation alone over the next decade, to about $30 billion
per year worldwide, from a combination of public and private investors.
IFC's mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, and provides technical assistance
and advice to governments and businesses. Since its founding in 1956,
IFC has committed more than $34 billion of its own funds and arranged $21
billion in syndications for 2,825 companies in 140 developing countries.
IFC's committed portfolio at the end of FY02 was $15.1 billion with an
additional $6.5 billion held for participants in loan syndications.