What is a Water District?

May 22, 2024

What is a Water District?

A water district is a local corporate entity that operates and maintains a water supply system in one or more provincial cities or municipalities. It is established on a local option basis and, like LWUA, is classified as a government-owned and controlled corporation or GOCC. A WD is run by a five-man Board of Directors through a General Manager.

What types of loans are open to Water Districts?

LWUA offers four loan windows to water districts (click here for details).

Loan Window 1 is open to Level III (individual household connection) and Level II (communal faucet) projects intended for the comprehensive development, repair or rehabilitation of new or existing water supply systems with interest rates ranging from 8.5-15 % p.a. and a 25-year repayment scheme that includes a 4-year grace period. Available loan is from 40-100 % of project cost.

Loan Window 2 is open to projects intended to generate new service connections or for watershed management, and to special loans intended for emergency purposes. Available loan is from 50-100 % of project cost and interest rates are based on prevailing applicable rates.

Loan Window 3 is open to projects intended to enhance water supply facilities or commercial operations. Maximum loan available is set to 100% of project cost while the repayment period is either the equivalent to the life of asset acquired or repayment period contracted with the fund source.

Loan Window 4, also called the Project Development and Efficiency Improvement Fund (PDEIF), is intended for project development and for efficiency improvement activities such as non-revenue water reduction. The former is available to all water districts and is offered at 6.56 % annual interest, the latter only to “semi-creditworthy” and “pre-creditworthy” water districts at interest rates of 8.2-8.7 % p.a.

Special Loan Window is the latest lending facility of LWUA. It is intended for water district expansion projects, well drilling and development of water sources. Maximum loan amount is P10 million and carries a 7.5% p.a. interest rate for a 10-year loan and 9% p.a. for a 15 to 20-year loan.

Source: Local Water Utilities Administration (LWUA)