Ensuring Sustainable Water for All

First published in InfraTalks, Aboitiz InfraCapital's monthly column in The Manila Times

Water is essential to our day-to-day lives and enables economic development, supporting our agriculture, industries, and household needs. As our nation continues to progress, the opportunity to enhance water availability and reliability through infrastructure becomes increasingly important.

The National Economic Development Authority (NEDA) highlights that we have significant room to expand our Level III water supply - a gold standard of safe, piped-in water for individual households. 45 percent of the population still relies on Level I unsafe sources, and an additional 11 percent on Level II communal faucets unsuitable for rapidly urbanizing communities. Without intervention, the country is projected to face high water stress by 2040 as demand outpaces our finite water resources.

Our growing economy and population are driving demand for reliable water access. This presents an opportunity to combine public sector vision, private sector expertise, and community engagement to build water infrastructure that supports continued development.

Aboitiz InfraCapital (AIC), the infrastructure arm of the Aboitiz Group, began its journey a decade ago to address infrastructure gaps in the country, building infrastructure projects that enable business and uplift communities. With this in mind, our first investment was strategically made in the water sector.

Today, the AIC Water platform ensures sustainable water for all through innovative and reliable water infrastructure. We participate in select segments in the water value chain with presence in key markets. AIC Water operates the country's largest private bulk water supply facility through Apo Agua Infrastructura, Inc. (Apo Agua) in Davao City; provides end-to-end water and wastewater services across our Economic Estates; and holds a strategic stake in Balibago Waterworks Systems, Inc., the country’s fourth-largest water distribution concessionaire. Our experience and expertise position us to support the development of high-growth urban centers across Visayas and Mindanao. Looking ahead, AIC Water aims to double its current 320 MLD total billed volume by expanding its bulk water business, industrial and municipal distribution, and strategic M&As.

In 2015, the Davao City Water District (DCWD) demonstrated foresight in planning for the region’s water security. They envisioned a bulk water project to augment its groundwater sources and enhance water availability, pressure, and reliability. With over 70 years of proven track record in the city’s power sector, the Aboitiz Group was honored with the opportunity to strengthen its commitment to the region’s progress as the selected partner of DCWD.

Through the landmark Public-Private Partnership (PPP) of Apo Agua and DCWD, the city’s vision has become a reality. Since our 300 MLD facility began commercial operations this February 2024, 96 percent of DCWD’s connections now enjoy uninterrupted water supply - up from 78 percent just a year ago - enabling service expansion into previously unserved and underserved areas. The project features sustainable innovations, with a 2-MW integrated hydroelectric plant that fully powers the water treatment process and a completely gravity-fed pipeline network.

AIC Water is also engaged in industrial operations, providing end-to-end water and wastewater services within the AIC Economic Estates. Our collective estate water businesses - LIMA Water, MEZ2 Water, West Cebu Water, and TARI Water - operate across a nearly 2,000-hectare footprint in Batangas, Cebu, and now Tarlac, supporting over 250 locators and 100,000 employees. We’ve implemented a SMART Water Network with a Supervisory Control and Data Acquisition (SCADA) system that gathers comprehensive real-time data to better inform operational decisions, improve efficiencies, and optimize resources.

AIC Water aims to enter the desalination space in the Philippines. Once prohibitively costly to develop and operate, technological advancements have made seawater desalination now globally accepted and adopted across the world, with a strong presence in the Middle East and emerging in Southeast Asia, particularly in Hong Kong and Singapore. Continuous research and development are bringing down capital requirements and operational expenses. Based on the current cost of desalination water production today, experts have forecasted production costs to drop by over one-third within the next five years, and by over half within the next twenty. Similar to the energy sector’s blended power generating and contracting strategy, cities need access to a diversity of water sources, from groundwater, surface water, and seawater desalination, to build resiliency of water supply and diversification of pricing. We view seawater desalination as a viable alternative for water-stress regions in the Visayas and Mindanao, where there is a lack of dependable raw water sources as well as infrastructure gaps for potable water to reach highly urban areas with growing water demands.

In the last ten years, AIC Water has developed expertise in bulk water production, water distribution and waste water services. We are constantly evaluating opportunities for PPPs, which are the key to developing solutions to address the country’s water security challenges. And so we also welcome the evolving regulatory landscape and frameworks that provide a unified approach to the development of the nation’s water sector. AIC Water is committed to addressing the infrastructure gap in the country’s water sector. We are ready to be a partner for communities in supporting inclusive development and ensuring equitable access to safe, potable water for all Filipinos.