Water resources protection

CWAG is a fast growing leading potable water operator in China, publicly-traded on the Hong Kong Stock Exchange with projects spread across various provincial cities and regions including Hunan, Henan, Hainan, Jiangsu, Hubei, Jiangxi, Guangdong and Chongqing. CWAG currently has 36 water projects (27 tap water supply, 4 raw water and 5 sewage treatment) that spans 30 cities across China. It has a combined daily integrated water treatment capacity of 5 million cubic meters (m3). CWAG`s core businesses are (1) tap water production and distribution; (2) connection and meter installation; and (3) EPC contracts for water and wastewater treatment projects. In addition, CWA owns approximately 1,700 acres of land acquired through its water concessions, and five ready-mix concrete plants, which supply both CWA construction projects and third party customers. IFC`s proposed investment in CWA consists of (i) an equity investment of up to US$30 million; (ii) an "A" loan of up to US$40 million and (iii) a loan of up to US$30 million in its capacity as the implementing entity for the Managed Co-Lending Portfolio Program (MCPP) in China Water Affairs Group Limited. In addition, IFC will also receive warrants in an aggregate amount of up to US$20 million, exercisable for 3 years at a significant premium over current market price. IFC`s investment will partially be used to finance the rehabilitation and expansion of tap water supply facilities, pipe networks, raw water infrastructure and sewage treatment facilities.

China