Philippines - Rural Water Supply and Sanitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-338B3-PH REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO 35.5 MILLION TO THE REPUBLIC OF PHILIPPINES FOR A RURAL WATER SUPPLY AND SANITATION PROJECT September 27, 1982 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1.0 = P 8.30 P 1.00 = US$0.12 P 1 million = US$120,480 P 1 billion = US$120 million ABBREVIATIONS ADB = Asian Development Bank LWUA = Local Water Utilities Administration MHS = Ministry of Human Settlements MLG = Ministry of Local Government MOH = Ministry of Health MPWH = Ministry of Public Works and Highways NEA = National Electrification Administration PIRC = Project Implementation and Review Committee RWDC = Rural Waterworks Development Corporation RWA = Rural Waterworks Association RWSA = Rural Waterworks and Sanitation Association FISCAL YEAR Government: January 1 to December 31 RWDC: January 1 to December 31  FOR OFFICIAL USE ONLY PHILIPPINES RURAL WATER SUPPLY AND SANITATION PROJECT Loan and Project Summary Borrower: Republic of the Philippines Beneficiary: The Rural Waterworks Development Corporation (RWDC) Amount: $35.5 million equivalent, including capitalized front-end fee. Terms: The loan would be for a term of 20 years, including 5 years of grace, with interest at 11.6% per annum. Relending The equivalent of $5.0 million of the loan proceeds would be Terms: relent by the Government to RWDC for 20 years, including 5 years of grace, with interest at 4% per annum. RWDC would pay a front-end fee of 1.5%, and a commitment charge of 0.75% on the undisbursed balance of the relent amount. The Government will bear the foreign exchange risk for the entire Bank loan. The relending rate is subsidized to support provi- sion of a basic need, safe drinking water, for the low income rural population. Project The proposed project-s major objectives are the development Description: and mobilization of local resources and the strengthening of local institutions responsible for the rural water supply and sanitation sector through financing part of the Government's rural water supply and sanitation program. The project-s rural water supply component provides for about 10,000 protected wells with pumps and 400 communal faucet systems benefitting about 1.5 and 0.2 million persons, respectively. The rural sanitation component provides for sanitary disposal of excreta for some 750,000 rural households (4.5 million persons) and is supported with health education and water quality surveillance. The project also includes research, training, and consulting services for rural water supply and sanitation works. Technical assistance is also provided for the preparation of high priority flood control, drainage and solid wastes management projects. The project's main risks are the limited experience of RWDC, which would mainly be responsible for the rural water supply component, and the Ministry of Health (MOH), which would be responsible for the sanitation component, with implementing | This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - a project of this magnitude and complexity, as well as the possibility of low community acceptance of the sanitation component. Consulting services, health education and training, provided for under the project, should help to lessen these risks. Also, the Ministry of Public Works and Highways (MPWH), which would be the implementing agency for the construction of wells and the development of water sources under the project, has extensive experience in this type of undertaking. Estimated Cost:/l Local Foreign Total - ($ million) ------ Rural water supply 6.1 12.5 18.6 Rural sanitation 15.4 4.0 19.4 Technical assistance and 1.4 1.1 2.5 training Preparation of future 3.6 2.0 5.6 projects Base Cost 26.5 19.6 46.1 Physical contingencies 2.3 1.8 4.1 Price contingencies 4.4 3.3 7.7 Total Project Cost 33.2 24.7 57.9 Front-end fee on Bank loan - 0.5 0.5 Total financing required 33.2 25.2 58.4 Financing Plan: Local Foreign Total