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                                                                   EXHIBIT 10.46

                             REIMBURSEMENT AGREEMENT
                                       FOR
                               LETTER OF GUARANTEE

                                                          Date: February 5, 2003

TO:          Scotiabank (Cayman Islands) Ltd.(Hereinafter called The "Bank")
(address):   P.O. Box 689GT, Grand Cayman, Cayman Islands

FROM:        Consolidated Water Co. Ltd                      (the "Applicant")
(address)    P.O. Box 1114GT, Grand Cayman, Cayman Islands

SUBJECT:     Letter of Guarantee in the amount of One Million United States
             Dollars (US$1,000,000)

             Expiring August 4,2003 (the "Guarantee") issued to The Cayman
             Islands Government (the "Beneficiary").

         IN CONSIDERATION OF the issue by the Bank of the Guarantee in the form
of substantially in the form of the Letter of Guarantee attached hereto in
favour of the Beneficiary, the Applicant agrees as follows:

1.       The Applicant will pay to the Bank on demand at its above address for
         value on the date of such demand the amount of each demand or other
         request for payment (each, a "Demand") made by the Beneficiary or its
         successors or assigns under the Guarantee (whether made before, on, or
         if in accordance with the law applicable to the Guarantee, after the
         expiry date stated in the Guarantee), except that:

         (a)      if such Demand is made under the Guarantee and payment by the
                  Bank is made in a currency other than United States dollars
                  the Applicant will pay the equivalent in United States
                  dollars, at the Bank's then selling rate of exchange for such
                  currency in the place in which such Demand is payable or, at
                  the option of the Bank, will pay to the Bank in such other
                  currency in a place, form and manner acceptable to the Bank;
                  and

         (b)      if a time Demand is made under the Guarantee, the Bank may
                  notify the Applicant of the amount and maturity date of such
                  Demand and the Applicant will make such payment without demand
                  sufficiently in advance of its maturity to enable the Bank to
                  arrange for cover in same day funds to reach the place where
                  such Demand is payable no later than the date of the maturity
                  of such Demand.

2.       The Applicant will pay to the Bank on demand:

         (a)      in respect of Demands paid by the Bank or any correspondent of
                  the Bank and not reimbursed to the Bank under Section I
                  hereof, interest on all amounts remaining unpaid under Section
                  I hereof from time to time at a fluctuating rate of interest
                  per annum equal to * 1.0% per annum above the rate of interest
                  determined and adjusted by the Bank from time to time as the
                  Bank's U.S. Dollar Base Rate for such amount applicable on the
                  day of demand and, thereafter, on the first day of each
                  month);

         (b)      commissions in respect of the Guarantee (so long as the Bank
                  shall be contingently obligated under the Guarantee) and fees
                  and charges for issuing guarantees all computed and payable at
                  such times and at such rates as and in accordance with the
                  Bank's prevailing practice at the time of determination; and

         (c)      all expenses which the Bank may pay or incur in connection
                  with the Guarantee.

         [ILLEGIBLE]

3.       The obligation of the Applicant to reimburse the Bank in accordance
         with Section I shall be absolute, unconditional and irrevocable and
         shall not be reduced by any Demand paid or acted upon being invalid,
         insufficient, fraudulent or forged or be subject to any defense or be
         affected by any right of set off, counter-claim or recoupment which the
         Applicant may now of hereafter have against a Beneficiary, the Bank or
         any other person for any reason whatsoever including the fact that the
         Bank or its correspondents paid a Demand or Demands (if applicable)
         aggregating up to the amount of the Guarantee notwithstanding:

         (a)      any contrary instructions from the Applicant;

         (b)      the occurrence of any event including, without limitation, the
                  commencement of legal proceedings to prohibit payment of such
                  Demand; or

         (c)      the issuance of any order of any government, agency, governing
                  body or court whether or not having jurisdiction in the
                  premises.

         Any action, inaction or omission taken or suffered by the Bank or by
         any of the Bank's correspondents under or in connection with the
         Guarantee or any Demand made thereunder, if in good faith and in
         conformity with foreign or Cayman Islands laws, regulations or customs
         applicable thereto shall be binding upon the Applicant and shall not
         place the Bank or any of its correspondents under any resulting
         liability to the Applicant. Without limiting the generality of the
         foregoing, the Bank and its correspondents may receive, accept or pay
         as complying with the terms of the Guarantee, any Demand thereunder,
         otherwise in order which may be signed by, or issued to, the
         administrator or any executor of, or the trustee and bankruptcy of, or
         the receiver for any property of or other person or entity acting as
         the representative or in the place of, the Beneficiary or its
         successors or assigns. The Applicant covenants that it will not take
         any steps, issue any instructions to the Bank or any of its
         correspondents or institute any proceedings intended to derogate from
         the right or ability of the Bank or its correspondents to honour and
         pay any Demand.

4.       All payments by the Applicant shall be made free and clear of and
         without deduction for any and all present and future taxes, levies and
         withholdings including stamp and documentary taxes, other than taxes
         imposed on the net income of the Bank, (collectively "Taxes"). If the
         Applicant is required by law to deduct any Taxes from or in respect of
         any amount paid or payable hereunder, such amount shall be increased as
         necessary so that the Bank receives an amount equal to the sum it would
         have received had no such deductions been made and the Applicant shall
         pay same to the relevant taxing authority and give to the Bank
         acceptable evidence of such payment. The Applicant will indemnify the
         Bank for any Taxes paid by the Bank in respect of any amount paid or
         payable by the Applicant hereunder. The provisions of this Section
         shall survive payment in full hereunder.

5.       Upon the happening and continuation of any one or more of the following
         events (an "Event of Default");

         (a)      the non-payment of any of the obligations of the Applicant
                  under this Agreement or otherwise when due;

         (b)      the failure of the Applicant to perform or observe any term or
                  covenant hereof;

         (c)      the failure of the Applicant to pay its debts as they become
                  due or the admission in writing by the Applicant of its
                  inability to pay its debts generally, the institution by or
                  against the Applicant of proceedings respecting bankruptcy,
                  insolvency, liquidation, winding up, reorganization,
                  arrangement, adjustment, protection, relief, composition of it
                  or its debts under any laws relating to bankruptcy, insolvency
                  or reorganization or relief of debtor or the seeking of entry
                  of an order for relief or the appointment of a receiver,
                  trustee or other similar official for the Applicant or for any
                  substantial part of its property or the taking of any
                  corporate action by the Applicant to authorize any of such
                  actions;

         (d)      the occurrence of any of the events with respect to any person
                  or entity which has guaranteed any obligations of the
                  Applicant to the Bank;

         then the amount of the Bank's contingent liability (as determined by
         the Bank) under the Guarantee, as well as any and all other obligations
         of the Applicant under this Agreement shall, at the option of the Bank,
         become due and payable immediately upon demand to the Applicant.

6.       All security now or hereafter held by the Bank for the payment or
         discharge of any and all present or future indebtedness and liability
         of the Applicant to the Bank and all property of the Applicant now or
         hereafter in the possession or control of the Bank for any purpose
         including monies on deposit and property held for safekeeping, shall be
         held by the Bank as security for the payment of all amounts which may
         become payable by the Applicant to the Bank under or in connection with
         this Agreement. If at any time the Bank requires collateral (or
         additional collateral), the Applicant will, on demand, assign and
         deliver to the Bank as security for any and all obligations of the
         Applicant now or hereafter existing under this Agreement collateral of
         a type and value satisfactory to the Bank or make such cash payment as
         the Bank may require.

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7.       Upon default by the Applicant in payment of any amount due and payable
         hereunder the Bank may, without advertisement and without notice to the
         Applicant, sell public or private sale or realize in such other manner
         as the Bank thinks fit all or any security held by the Bank upon such
         terms and conditions as the Bank thinks fit; and any moneys received by
         the Bank as proceeds of any such sale or realization, after deduction
         of all costs and expenses incurred by the Bank in connection therewith,
         shall be applied against any amount payable by the Applicant to the
         Bank under this Agreement and on any other indebtedness or liability of
         the Applicant to the Bank.

8.       The Applicant will indemnify the Bank from and against:

         (a)      all loss or damage to the Bank arising out of its issuance of,
                  or any other action taken by the Bank in connection with, the
                  Guarantee other than loss or damage resulting from its gross
                  negligence or willful misconduct; and

         (b)      all costs and expenses (including attorneys' fees and
                  expenses) of all claims or legal proceedings arising out of
                  the Bank's issuance of the Guarantee or incident to the
                  collection of amounts owed by the Applicant hereunder or the
                  enforcement of the Bank's rights hereunder, including, without
                  limitation, legal proceedings related to any court order,
                  injunction, or other process or decree restraining or seeking
                  to restrain the Bank from paying any amount under a Demand.

9.       Upon payment by the Bank of any Demand or the occurrence and during the
         continuance of any Event of Default, the Bank is hereby authorized to
         set-off and apply any and all deposits (at any time held) and other
         indebtedness at any time owing by the Bank to or for the credit of the
         account of the Applicant against any and all obligations of the
         Applicant now or hereafter existing under this Agreement irrespective
         of whether or not the Bank shall have made demand under this Agreement
         and despite such deposit, indebtedness or obligation being unmatured or
         contingent. The rights of the Bank under this Section 9 are in addition
         to other rights and remedies which the Bank may have.

10.      If for the purpose of obtaining judgement in a court or tribunal in any
         jurisdiction it is necessary to convert an amount due hereunder in any
         currency (the "Obligation Currency") to an equivalent amount of another
         currency (the "Judgement Currency") such conversion shall be made at
         the Rate of Exchange quoted by the The Bank of Nova Scotia in New York,
         United States of America at 10:00 a.m. on the business day immediately
         prior to the date of judgement (the "Pre-Judgement Date"). As a
         separate obligation which shall not be affected by judgement being
         obtained for other sums due hereunder, if the Rate of Exchange used to
         determine such equivalent amount is different from the Rate of Exchange
         prevailing on the date of actual payment of the amount so due, then the
         Applicant will pay such additional amounts (if any, but in any event
         not a lesser amount) as may be necessary to ensure that the amount of
         the Judgement Currency received by the Bank will be sufficient to
         permit the Bank to convert such amount of the Judgement Currency to an
         amount in the Obligation Currency equal to the amount of the Obligation
         Currency owed hereunder on the Pre-Judgement Date.

         [ILLEGIBLE]

11.      This Agreement shall be binding upon the Applicant, its successors and
         assigns and shall ensure to the benefit of the Bank, its successors,
         transferees and assigns. Any provision of this Agreement which is void
         or unenforceable shall be ineffective in the extent void or
         unenforceable and shall be severable from the other provisions hereof
         and this Agreement shall be interpreted as if such provision were not
         included herein. This Agreement shall be governed by and construed in
         accordance with the laws of The Cayman Islands except to the extent
         that such laws are inconsistent with the laws under which a Demand
         maybe made under the Guarantee.

         [ILLEGIBLE]

12.      If, with respect to the Guarantee, the expiry date be extended, the
         amount be increased or any of the terms and conditions be altered at
         the request of the Applicant, all of the terms and conditions of this
         Agreement will apply to the Guarantee as amended and remain in full
         force and effect without releasing any party hereto.

                                        Consolidated Water Co. Ltd

Witness: /s/ [ILLEGIBLE]                /s/ Jeffrey M. Parker
         ---------------                ----------------------------------
                                        (AUTHORIZED SIGNATURES)
                                        (IN CASE OF INCORPORATED COMPANIES AND
                                        OTHER ORGANIZATIONS THIS FORM MUST BE
                                        SIGNED BY PROPERLY AUTHORIZED OFFICIALS.
                                        THE COMPANY NAME MUST APPEAR ABOVE THE
                                        SIGNATURES.)