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Philippine deal gives WorldWater stock a needed boost
From a near all-time stock price low, WorldWater Corp. has bounced
back, following the conclusion of a deal to supply the Philippines
with solar pumps as part of a $52 million nationwide irrigation
development project.
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© Anand Rangarajan /
WorldWater Corp. |
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Agriculture Secretary Montemayor of the Philippines
(left) shaking hands with WorldWater’s Kelly at the
signing of a $52 million deal, while President Arroyo
(middle) looks on. |
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On Dec. 6, the day of the
announcement, the stock was trading at $0.15 USD per share. But by the
end of the next day, WorldWater shares had doubled in value.
»We’re
just leaping off the ground,«
says Quentin T. Kelly, chairman and CEO of the New Jersey-based
company, which specializes in solar-based water management for
developing countries.
The $52 million project is part of $230 million in guarantees,
credits, and grants made available by the US Department of Agriculture
to modernize Philippine agriculture and reduce rural poverty. Kelly
signed the agreement on Nov. 20 in Washington, D.C., with Philippine
president Gloria Macapagal Arroyo, Philippine agriculture secretary
Leonardo Montemayor, and Thelma Askey, director of the US Trade and
Development Agency (USTDA). It includes about $300,000 from USTDA for
a feasibility study, to be carried out by WorldWater hydrogeologists
and engineers through next April in conjunction with the company’s
Philippine subsidiary WorldWater (Phils) Inc. Working with the
Philippine National Irrigation Administration, they will determine the
size and placement of the solar pumps, which will be located on many
of the country’s islands. »This
the first time that mainstream power is going to be supplied by solar
throughout a country,«
Kelly claims. The installation of the pumps is expected to take 18 to
24 months.
WorldWater is arranging financing through PNC Bank in Philadelphia,
with the US Export/Import Bank providing a guarantee of 85 percent,
all backed by a Philippine government sovereign guarantee, says Kelly.
In some cases, he expects WorldWater, which currently manufactures two
sizes of solar pumps, to install solar water stations for the retail
dispensing of drinking water using a debit card. The company, which
has been active in the Philippines since 1997, has another $10 million
in projects around the country, with the implementation of the first
systems on the island of Cebu planned for January (see PI 1/2000, p.
17).
The deal seems to have come just in time for the 18-year-old firm. In
third-quarter results announced in mid-November, WorldWater revealed
that it owed $70,000 in dividends to shareholders. That debt, says
Kelly, has since been converted into stock for the shareholders.
Without revealing details, he says the company’s future cash flow is
in good shape, including an upcoming $2.5 million advance for the
Philippine project. wph
William P.
Hirshman
© PHOTON International, January 2002
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