Karnataka Water and Sanitation Pooled Fund (KWSPF) is a Government of Karnataka Trust registered under the Indian Trust Act, 1882, was created in the year 2003
The Government of Karnataka has approved KWSPF to function as ‘State Pooled Finance Entity’ for execution of Pooled Finance Development Fund (PFDF) Scheme of Government of India and for financing for the development of Infrastructural projects in the State of Karnataka.
Karnataka Urban Infrastructure Development and Finance Corporation Limited (KUIDFC) is the Fund Manager/ Asset Management Company for the issue of Bonds.
KWSPF raised Rs.100 crores Bonds in the year 2005 for the first project it took up viz., “The Greater Bangalore Water Supply and Sewerage Project (GBWASP)”.
The Unique feature of the GBWAS Project is that the project is partly financed by the collection of ‘Beneficiary Capital Contribution’ from the users which is a new precedent brought into the project under the pooled finance framework and is designed specifically to serve as a model for future municipal financings projects.
To mobilize resources for the infrastructure projects under pooled finance structure and to borrow, raise monies or loans or receive grants or accept contributions;
- To provide financial assistance to Urban Local Bodies, Statutory Boards, Public Sector Undertakings for setting up infrastructure projects in the State of Karnataka.; Enable market access for ULBs, statutory boards, Public Sector Undertakings, for setting up Infrastructure Projects in the State of Karnataka with a cost effective pooled finance;
- To guarantee, at the request of the AMC/Fund Manager the performance of any contract or obligations and the payment on any bond issue or mobilisation of resources under the pooled finance structure;
- To invest any money of the Trust, in any investments as may be thought proper and as may be necessary. The income from such investments shall be utilised to fulfil the objective of the Trust;
- To act as nodal or any other agencies on behalf of the Central and or the State Governments for water, sanitation and or any other infrastructure projects.
- To do all other things necessary and conducive to the attainment of all these objects.
Greater Bangalore Water and Sewerage Project
- Providing water supply and drainage to peripheral areas in and around Bangalore – Initiated in 2005.
- Total Distribution Network approximate area is 330 square Kms. As on date nearly 1,62,112 numbers house service connections was provided -source BWSSB.
- Project investment: Rs.537.00 crore financed partly by Tax Free Bonds of Rs.100 crore raised in 2005. Bond obligations met in time. As on date Bond amount has been reduced to Rs.41.67 crore after 7th partial redemption of Bond June-2015.
- Unique financial structure:
- Escrow mechanism
- Short fall undertaking from GoK
- Bond Service Fund
- USAID guarantee for 50% of principal in arrears, if any Initially rated by ICRA AA (SO) and periodically revalidated .
Chief Minister’s special grants of Rs. 100 crore to each Grade 2 City Corporations
City Corporations selected:
To give more preference to providing Drinking Water facilities
Initiated in 2011-12
Benefit: Basic amenity of providing drinking water
Projects investment of Rs.700 crore – Government Grants Rs.350 crore and Bank Loan raised by KWSPF Trust Rs. 350 crore.
Grants released by GoK so far: Rs.350 crore crore
Raised Rs.350 crore Bank loans and released Rs.147-65 crore as on 31.03.2016 as per DMA’s request.
Out of 1429 projects,1270 projects were completed & remaining are under progress.
The DMA will be the overall coordinating Agency
Uniquely financially structured:
Securitisation of SFC Grants
Short fall undertaking from GoK
Initially rated by ICRA A+ (SO) for Bank loan of Rs.250 crores in the first tranche and for 2nd tranche bank loan of Rs.250 crore INDIA RATINGS has given rating of AA-(SO) and both rating are periodically revalidated.
Chief Minister’s Small and Medium Development programme under phase–1
Providing basic infrastructure (roads, water supply, Sewerage drainage) in 211 Small & Medium ULBs in Karnataka.
- Initiated in 2009-10
- Benefit: Promote congenial urban environment in several Small & Medium Towns to spur economic growth
- Projects investment of Rs.1454.00 crore – Government Grants Rs.854 crore and Bank Loan raised by KWSPF Trust Rs. 600 crore. Project is in completion stage.
- Grants released by GoK so far: Rs.720.29 crore and by KWSPF Trust Rs.600 crore. Total release Rs.1,320.29 crore An expenses of Rs.1296.92 crore was incurred as on 31.03.2016 as per DMA
- 7,852 projects completed, 358 under progress out of 8301 projects
- The individual projects as recommended by the District Committee and approved by Directorate of Municipal Administration for coverage under the claim. DMA monitors the scheme from physical and financial implementation aspects.
- Uniquely financially structured:
- Securitization of SFC Grants
- Short fall undertaking from GoK • The structure put-in place and rated by ICRA as A+ (SO) envisages channeling the residual portion of the SFC devolutions to meet and commitment under the loan. • Best possible commercial ratings. Re-payment track record and the system adherence has been up-to date.
Chief Minister’s Small and Medium Development programme under phase–2
- Providing basic infrastructure (Cost allocation 80% for roads and balance 20% for Sewarage) in 211 Small & Medium ULBs in Karnataka
- Initiated in 2012-13
- Benefit: Promote congenial urban environment in several Small & Medium Towns to spur economic growth.
- Projects investment of Rs. 2010 crore – Government Grants Rs.1010 crore and Bank Loan to be raised by KWSPF Trust Rs.1000 crore
- Grants released by Gok so far: Rs.1000 crore
- Raised Rs.500 crore Bank loans for projects up to 31/3/2016 and released in Rs. 317.95 crore loans.
- Out of 2050 projects, 1264 projects completed & remaining works are under progress.
- The DMA is the overall coordination agency
- Uniquely financially structured
- Securitization of SFC Grants
- Short fall undertaking from GoK for Rs.250 crore Bank Loan in the first tranche
- Initially rated by ICRA as A+ (SO) and periodically revalidated periodically and for Rs.250 crore of the 2nd tranche it is rated by Indian Ratings as AA- (SO).