The World Bank has approved a $250.87 million loan to expand climate-resilient water and sanitation services in Bohol, Siargao and Jolo, marking its first financing for the Philippines since the country was upgraded to upper-middle-income country (UMIC) status in July.

In a statement over the weekend, the lender said its board approved the Philippines Accelerated Water and Sanitation Project in Selected Areas (AWSPSA) on 31 July.

The project has a total cost of $268.62 million, with the balance to be funded by the Philippine government and private-sector equity.

“This project tackles the core drivers of water insecurity and service gaps — climate vulnerability, operational inefficiencies, and financing constraints — while prioritizing the needs and voices of women, youth, and vulnerable communities,” World Bank Division Director for the Philippines, Malaysia and Brunei Zafer Mustafaoğlu said.

“By strengthening institutions and mobilizing private participation, it will help deliver reliable, safe services and support sustainable economic and tourism growth for island communities,” he added.

The international lender said Bohol, Siargao and Jolo were selected based on poverty and water-access gaps, vulnerability to droughts and floods, and project readiness, including the availability of feasibility studies, permits and local government support.

The project aims to address significant water-access gaps and vulnerability to droughts, floods and other climate risks across the three islands.

It will be implemented by the Department of Public Works and Highways and the Department of the Interior and Local Government.

The World Bank expects the project to generate around 8,700 jobs within five years of completion, primarily through construction, with employment gains potentially reaching 46,500 over 25 years as improved water and sanitation services support broader economic activity.

Described by the World Bank as the Philippines’ first comprehensive water and sanitation project covering the entire service chain, AWSPSA will finance climate-resilient water supply systems, storage and distribution networks, sanitation facilities, and water, sanitation and hygiene infrastructure.

It will also strengthen the governance and institutional capacity of local water service providers and pilot closer coordination between the National Government and local governments in meeting the country’s water and sanitation targets and the United Nations’ Sustainable Development Goal 6.