<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(MARK ONE)

       [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the quarterly period ended MARCH 31, 2002

                                     OR

       [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the transaction period from _____________ to _____________

                         Commission File Number: 0-25248

                           CONSOLIDATED WATER CO. LTD.
     ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

       CAYMAN ISLANDS                                  N/A
----------------------------------    -----------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

   TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX 1114GT,
                 GRAND CAYMAN, B.W.I.                              N/A
-----------------------------------------------------    ----------------------
       (Address of principal executive offices)                 (Zip Code)

Registrant's Telephone number, including area code:  (345) 945-4277

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
         Yes [X] No [  ]

As at May 10, 2002, there were 3,981,464 of the registrant's ordinary shares of
common stock, with CI$ 1.00 par value, outstanding.


<PAGE>


EXCHANGE RATES

Unless otherwise indicated, all dollar amounts are in United States Dollars and
references to "$", "U.S.", or "U.S. $" are to United States Dollars.

The official fixed exchange rate for conversion of CI$ into U.S. $, as
determined by the Cayman Islands Monetary Authority, has been fixed since April
1974 at U.S. $1.20 per CI $1.00.

The official fixed exchange rate for conversion of BZE$ into U.S. $, as
determined by the Central Bank of Belize, has been fixed since 1976 at U.S.
$0.50 per BZE $1.00.

The official fixed exchange rate for conversion of BAH$ into U.S.$, as
determined by the Central Bank of The Bahamas, has been fixed since 1973 at U.S.
$1.00 per BAH $1.00.



<PAGE>





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

SECTION     DESCRIPTION                                                           PAGE
-------     -----------                                                           ----
<S>                                                                                 <C>
PART I      FINANCIAL INFORMATION

  Item 1.   Financial Statements

            Condensed Consolidated Balance Sheets as of March 31, 2002 and
                December 31, 2001.................................................  1

            Condensed Consolidated Statements of Income for each of the Three
                Months ended March 31, 2002 and 2001 .............................  2

            Condensed Consolidated Statements of Cash Flows for each of the
                Three Months ended March 31, 2002 and 2001.....................     3

            Notes to Condensed Consolidated Financial Statements.............       4

  Item 2.   Management's Discussions and Analysis of Financial Condition and
                Results of Operations.............................................  7

  Item 3.   Quantitative and Qualitative Disclosures about Market Risk...........  11


PART II      OTHER INFORMATION

  Item 2.   Changes in Securities and Use of Proceeds............................. 12

  Item 6.   Exhibits and Reports on Form 8-K...................................... 12

SIGNATURES ....................................................................... 13

</TABLE>

FORWARD-LOOKING STATEMENTS

This Form 10-Q for Consolidated Water Co. Ltd. (the "Company") includes
statements that may constitute "forward-looking" statements, usually containing
the words "believe," "estimate," "project," "intend," "expect" or similar
expressions. These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. Factors that would cause
or contribute to such differences include, but are not limited to, continued
acceptance of the Company's products and services in the marketplace, changes in
its relationship with the governments of the jurisdictions in which it operates,
the ability to successfully secure contracts for water projects in other
countries, the ability to develop and operate such projects profitably, and
other risks detailed in the Company's other periodic report filings with the
Securities and Exchange Commission. By making these forward-looking statements,
the Company undertakes no obligation to update these statements for revisions or
changes after the date of this Form 10-Q.


<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

                           CONSOLIDATED WATER CO. LTD.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      (Expressed in United States Dollars)
<TABLE>
<CAPTION>

                                                      MARCH 31,        DECEMBER 31,
                                                        2002              2001
                                                    -----------         -----------
                                                    (UNAUDITED)
<S>                                                   <C>                   <C>
ASSETS

CURRENT ASSETS
     Cash and cash equivalents ............           1,177,293             516,446
     Accounts receivable ..................           1,781,750           1,323,156
     Spares inventory .....................             312,583             271,134
     Inventory of water ...................              52,859              48,377
     Prepaid expenses and other assets ....             241,893             319,900
                                                    -----------         -----------
Total current assets ......................           3,566,378           2,479,013

     Property, plant and equipment ........          19,789,383          18,414,935
     Intangible asset .....................           1,766,066           1,814,780
     Investment ...........................              12,450              12,450
                                                    -----------         -----------
Total assets ..............................         $25,134,277         $22,721,178
                                                    ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Bank overdrafts ......................             500,000                  --
     Dividends payable ....................             473,416             499,383
     Accounts payable and other liabilities             821,097           1,087,470
     Stock compensation liability .........             148,050             210,324
     Current portion of long term debt ....             505,840             355,840
                                                    -----------         -----------
Total current liabilities .................           2,448,403           2,153,017

     Long term debt .......................           2,551,304           1,213,804
     Security deposit .....................             102,763              52,763
     Advances in aid of construction ......              36,274              37,494
                                                    -----------         -----------
Total liabilities .........................           5,138,744           3,457,078
                                                    -----------         -----------

STOCKHOLDERS' EQUITY
     Common stock .........................           4,741,759           4,704,077
     Additional paid-in capital ...........           7,084,181           6,896,753
     Vested redeemable preferred stock ....               2,841               2,841
     Non-vested redeemable preferred stock               27,393              27,393
     Retained earnings ....................           8,139,359           7,633,036
                                                    -----------         -----------
Total stockholders' equity ................          19,995,533          19,264,100
                                                    -----------         -----------

Total liabilities and stockholders' equity          $25,134,277         $22,721,178
                                                    ===========         ===========
</TABLE>


                  The accompanying information and notes are an
       integral part of these condensed consolidated financial statements


                                       1
<PAGE>


                           CONSOLIDATED WATER CO. LTD.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                      (Expressed in United States Dollars)
<TABLE>
<CAPTION>

                                                                               THREE MONTHS         THREE MONTHS
                                                                              ENDED MARCH 31,       ENDED MARCH 31,
                                                                                   2002                 2001
                                                                              ---------------       ---------------
<S>                                                                              <C>                  <C>
Water sales ..........................................................           3,107,496            2,857,204
Cost of water sales ..................................................          (1,666,452)          (1,483,389)
                                                                               -----------          -----------
Gross profit .........................................................           1,441,044            1,373,815
                                                                               -----------          -----------
Indirect expenses ....................................................            (600,223)            (647,360)
                                                                               -----------          -----------
Income from operations ...............................................             840,821              726,455
                                                                               -----------          -----------
Other income:
     Interest income .................................................               6,432                   30
     Other income ....................................................              79,247              104,405
                                                                               -----------          -----------
                                                                                    85,679              104,435
                                                                               -----------          -----------
Net income ...........................................................         $   926,500          $   830,890
                                                                               ===========          ===========
Basic earnings per share .............................................         $      0.24          $      0.21
                                                                               ===========          ===========
Diluted earnings per common share ....................................         $      0.23          $      0.21
                                                                               ===========          ===========
Dividends declared per share .........................................         $     0.105          $      0.10
                                                                               ===========          ===========

Weighted average number of common shares used in the determination of:

Basic earnings per share .............................................           3,923,209            3,866,921
                                                                               ===========          ===========

Diluted earnings per share ...........................................           4,054,949            3,977,299
                                                                               ===========          ===========
</TABLE>


                  The accompanying information and notes are an
      integral part of these condensed consolidated financial statements.



                                       2
<PAGE>



                           CONSOLIDATED WATER CO. LTD.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                      (Expressed in United States Dollars)

<TABLE>
<CAPTION>

                                                               THREE MONTHS         THREE MONTHS
                                                              ENDED MARCH 31,      ENDED MARCH 31,
                                                                  2002                 2001
                                                              ---------------      ---------------
<S>                                                               <C>                  <C>
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES .....             590,025              676,906
                                                              -----------          -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
   Purchase of property, plant and equipment ........          (1,681,993)            (446,231)
                                                              -----------          -----------
Net cash used in investing activities ...............          (1,681,993)            (446,231)
                                                              -----------          -----------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
   Net proceeds from issuance of common stock .......             162,835               50,000
   Draw down of credit facility .....................           1,500,000                   --
   Principal payments of long term debt .............             (12,500)                  --
   Dividends paid ...................................            (397,520)            (390,146)
   Increase in bank overdraft .......................             500,000              189,226
                                                              -----------          -----------
Net cash provided by (used in) financing activities .           1,752,815             (150,920)
                                                              -----------          -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS ...........             660,847               79,755

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....             516,446              250,837
                                                              -----------          -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..........         $ 1,177,293          $   330,592
                                                              ===========          ===========
</TABLE>


                  The accompanying information and notes are an
      integral part of these condensed consolidated financial statements.



                                       3
<PAGE>


                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The accompanying financial statements should be read in conjunction with the
2001 Annual Report for the Company on Form 10-K. The interim condensed
consolidated financial statements are unaudited, but in the opinion of
management, reflect all adjustments necessary for a fair presentation of results
for such periods. All adjustments are of a normal recurring nature.

1. PRINCIPAL ACTIVITY AND STATUS

Consolidated Water Co. Ltd. (the "Company") and its wholly-owned subsidiaries
(together the "Group") use reverse osmosis technology to produce fresh water
from seawater. The Group processes and supplies water to its customers in Grand
Cayman, Cayman Islands; Ambergris Caye, Belize; and South Bimini, Bahamas. The
Company's exclusive license in Grand Cayman allows it to process and supply
water to certain areas of Grand Cayman for a period of twenty years from July
11, 1990 in addition to having a right of first refusal on the extension or
renewal thereof. The Group has a contract with Belize Water Services Ltd.
("BWSL") of Belize, formally known as Water and Sewerage Authority of Belize, to
supply water to BWSL in Ambergris Caye expiring in 2011. At the expiry of the
contract, BWSL may at its option extend the term of the agreement or purchase
the plant outright. In addition, on July 11, 2001 the Company commenced
supplying water under a ten year agreement to South Bimini International Ltd., a
Bahamian company, which owns and operates resort properties on South Bimini
Island, Bahamas. The base price of water supplied by the Group, and adjustments
thereto, are generally determined by the terms of the license and contracts,
which provide for adjustments based upon the movement in the government price
indices specified in the license and contracts respectively as well as monthly
adjustments for changes in the cost of energy.

2. PURCHASE OF ASSETS

On February 1, 2002, the Company acquired the reverse osmosis plant that was
previously owned and operated by Cayman Hotel and Golf Inc., a company which
owns and operates the Hyatt Hotel and Britannia Golf Course and developed the
Britannia condominiums and villas. The acquisition has been accounted for by the
purchase method. The total purchase price of $1,500,000 was paid in cash. The
fair value of assets acquired was $1,500,000 which comprised solely of property,
plant and equipment representing the reverse osmosis plant.

3. SEGMENTED INFORMATION

Under FAS 131 `Disclosure about Segments of an Enterprise and Related
Information' the supply of water to Cayman Islands, Belize and Bahamas are
considered by management as separate business segments. The basis of measurement
of segment information is the same as that adopted for the condensed financial
statements.



                                       4
<PAGE>


                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


3. SEGMENT INFORMATION (CONTINUED)

AS AT MARCH 31 AND FOR THE THREE MONTHS THEN ENDED

<TABLE>
<CAPTION>

                             Cayman Islands                 Belize                   Bahamas (*)                  Total
                        ------------------------    ------------------------    ----------------------    ------------------------
                            2002          2001          2002          2001          2002        2001          2002          2001
                        ----------    ----------    ----------    ----------    ----------     -------    ----------    ----------
<S>                      <C>           <C>             <C>           <C>            <C>                    <C>           <C>
    Water sales ......   2,761,821     2,537,292       325,906       319,912        19,769          --     3,107,496     2,857,204
    Other income .....      79,635       104,435         6,040            --             4          --        85,679       104,435
    Cost of water
       sales..........   1,440,001     1,311,384       196,051       172,005        30,400          --     1,666,452     1,483,389
    Indirect expenses      557,406       608,186        41,375        39,174         1,442          --       600,223       647,360
    Cost of water
       sales and
       indirect expenses
       include:
       Interest ......      20,941        29,367           544            --            --          --        21,485        29,367
       Depreciation ..     251,983       218,453        44,614        39,837        10,948          --       307,545       258,290
    Net income  (loss)     844,049       722,157        94,520       108,733       (12,069)         --       926,500       830,890
    Property Plant
       and Equipment..  17,178,724    15,366,563     1,500,375     1,630,343     1,110,284     834,925    19,789,383    17,831,831
</TABLE>

---------------
(*)   On December 18, 2000, the Company entered into the agreement with South
      Bimini International Ltd., and began operations in the Bahamas on July 11,
      2001.

4. SHARE CAPITAL

Under the provisions of the Land Holding Companies Share Transfer Tax Law of the
Cayman Islands, tax is payable on the transfer of shares in the Company. Prior
to becoming quoted on Nasdaq, the Company paid this tax on private share
transfers. The Company has never paid tax on transfers of its publicly traded
shares. Management believes that the likelihood that Government will seek to
collect this tax on transfers of the Company's publicly traded shares is remote.
Management, therefore, has not provided for a share transfer tax liability in
these financial statements

5. CONTINGENCIES

The license that the Company has with the government of the Cayman Islands (the
"Government") requires it to obtain approval from the Government for an issuance
or transfer of shares which (a) exceeds 5% of the issued shares of our company,
or (b) would, upon registration, result in any shareholder owning more than 5%
of the issued share capital of the Company.

By letter dated May 3, 2002, the Government of the Cayman Islands advised the
Company that the 5% ownership and transfer restrictions imposed in the Licence
will be removed.



                                       5
<PAGE>
                           CONSOLIDATED WATER CO. LTD.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


6. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit attributable
to stockholders by the weighted average number of ordinary shares of common
stock in issue during the year.

The net income and weighted average number of ordinary shares of common stock
and potential ordinary shares figures used in the determination of the basic and
diluted earnings per ordinary share of common stock are summarized as follows:
<TABLE>
<CAPTION>

                                                                  THREE MONTHS         THREE MONTHS
                                                                 ENDED MARCH 31,      ENDED MARCH 31,
                                                                      2002                2001
                                                                 ---------------      ---------------
<S>                                                               <C>                 <C>
  Net income used in determination of diluted earnings per
  ordinary share of common stock .........................        $   926,500         $   830,890

  Less:
  Dividends paid on non-vested
  redeemable preferred stock .............................             (2,397)             (2,365)

  Earnings attributable to vested
  redeemable preferred stock .............................               (553)             (2,125)
                                                                  -----------         -----------
  Net income available to holders of ordinary shares of
  common stock in the determination of basic earnings per
  ordinary share of common stock .........................        $   923,550         $   826,400
                                                                  ===========         ===========
  Weighted average number of ordinary shares  of common
  stock used in the determination of basic earnings per
  ordinary share of common stock .........................          3,923,209           3,866,921

  Plus:
  Weighted average number of redeemable preferred stock
  outstanding during the year ............................             25,195              33,634

  Potential dilutive effect of unexercised options .......            106,545              76,744
                                                                  -----------         -----------
  Weighted average number of shares
  used for determining diluted earnings
  per ordinary share of common stock .....................          4,054,949           3,977,299
                                                                  ===========         ===========

</TABLE>

                                       6
<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

WATER SALES AND OTHER INCOME ("TOTAL INCOME")

Total Income increased by 7.8% from $2,961,639 to $3,193,175 for the three
months ended March 31, 2001 and 2002, respectively. Total Income is comprised of
water sales and other income.

The Cayman operations increased Total Income by $199,729 for the three months
ended March 31, 2002, representing 86.3% of the increase.

The Belize operations increased Total Income by $12,034 for the three months
ended March 31, 2002, representing 5.2% of the increase.

Finally, the addition of the Bahamas operations as of July 11, 2001 increased
Total Income by $19,773 for the three months ended March 31, 2002, representing
8.5% of the increase.

Sales in Cayman are made within our license area to approximately 3,000
customers. All sales in Belize are to one customer, Belize Water Services Ltd.,
a private company that acquired the assets of Belize Water and Sewerage
Authority, which was previously a government statutory corporation. The terms of
our contract have not changed as a result of the privatization of Belize Water
and Sewerage Authority. Currently in the Bahamas, all sales are to one customer,
South Bimini International Ltd. known as Bimini Sands Resort and Marina, which
uses water at their hotel, condominiums and full service marina.

The largest changes occurred in the Cayman operations and were the result of the
purchase of the Hyatt reverse osmosis seawater conversion plant on February 1,
2002. This plant was previously owned and operated by Cayman Hotel and Golf
Inc., a company which owns and operates the Hyatt Hotel and Britannia Golf
Course and developed the Britannia condominiums and villas. As a result of this
purchase, the Hyatt Hotel and Britannia Golf Course entered into a 25 year water
supply agreement, and we also began to supply water to the Britannia
condominiums and villas under our customer contracts. When we began supplying
water to the hotel, condominiums and villas the existing dispute settlement
agreement with Cayman Hotel and Golf Inc. was extinguished.

Total water sales increased by 8.8% from $2,857,204 to $3,107,496 for the three
months ended March 31, 2001 and 2002, respectively. The total water sales
increase of $250,292 was a result of several factors detailed below.

Our Cayman operation added $224,529 to water sales for the three months ended
March 31, 2002, which is 89.7% of the total increase. In January 2002, the
automatic inflation adjustment decreased our Cayman Islands water rates for most
of our customers by an average of 0.4%. This was offset by an 18.2% increase in
the number of US gallons sold over the same period in the prior year. This
increase in the number of US gallons sold was the result of supplying water to
the Hyatt Hotel which makes up 39.3% of the increase, and the Britannia
condominiums and villas which makes up an additional 39.0% of the increase. In
addition, bulk sales of $59,257 were made to the Water-Authority (Cayman) to
make up temporary shortfalls in their production capacity, which did not occur
in the same period as the prior year.



                                       7
<PAGE>

Our Belize operation added $5,994 to water sales for the three months ended
March 31, 2002, which is 2.4% of the total increase. This increase was due to
both an increase of 0.7% increase in the US gallons sold and the automatic
inflation adjustment, which increased our Belize water rates in June 2001 by
0.53%.

Finally, the addition of the Bahamas operations as of July 11, 2001 increased
water sales by $19,769 for the three months ended March 31, 2002, representing
7.9% of the increase.

Other income decreased by 18.0% from $104,435 to $85,679 for the three months
ended March 31, 2001 and 2002, respectively. This decrease was a result of the
February 1, 2002 termination of the dispute settlement agreement with Cayman
Hotel and Golf Inc. as discussed above. This decrease was partially offset by
small increases in meter rentals, due to increased customers, and interest
income on receivables in our Belize operations, due to the temporary delay in
payment by Belize Water Services Ltd.

EXPENSES

Cost of water sales increased by 12.3% from $1,483,389 to $1,666,452 for the
three months ended March 31, 2001 and 2002, respectively.

Our Cayman operations increased cost of water sales by $128,617 for the three
months ended March 31, 2002, representing 70.3% of the increase. Although cost
of water sales increased, it increased at a lower rate than our water sales
since we benefit from efficiency savings in our water production operation when
we produce more water. This increase was mainly due to the costs associated with
operations of the new Britannia RO seawater conversion plant which can produce
water at a lesser cost than we purchase from OCL at our Governor's Harbour
plant.

Our Belize operations increased our cost of sales by $24,046 for the three
months ended March 31, 2002, which represents 13.1% of the overall cost of sales
increase. This increase resulted from the cost of settling various claims for
compensation with our customer in Belize, which were the result of our equipment
failures that occurred in August and September 2001, and a minor miscalculation
in the annual inflation adjustment formula in our contract. This miscalculation
dates back to November 1995 and upon correction reduced our unit rate for water
to our customer by $0.09 per 1,000 US gallons. The total cost of the settlement
with BWSL is $41,597, of which $12,209 was already accrued at December 31, 2001,
and the balance of $29,388 expensed in 2002. These settlement costs were
partially offset by late payment interest accrued on receivables, which amounted
to $33,812 of which $27,772 was already accrued at December 31, 2001, and the
balance of $6,040 accrued in 2002. The remaining $7,785 due to BWSL after
offsetting the interest was credited against their April 2002 invoice. Although
our Belize operations were not as efficient as our Cayman operations during this
same period in respect of our cost of sales per unit of water produced, for the
period ended March 31, 2002, our electricity and diesel costs in Belize were
$20,821 lower than in the same period in the prior year. This resulted because
in 2002 we were able to utilize a more efficient diesel engine instead of an
electric motor to power one of our production trains. In early 2001 we
experienced a mechanical failure of one of our diesel engines, which caused us
to incur additional repair and operational costs. This failure was rectified in
late 2001.

Finally, the addition of the Bahamas operations as of July 11, 2001 increased
cost of water sales by $30,400 for the three months ended March 31, 2002,
representing 16.6% of the increase.

Gross profit margins decreased from 48.1% to 46.4% for the three months ended
March 31, 2001 and 2002, respectively.

Gross profit margins for our Cayman operations decreased from 48.3% to 47.9% for
the three months ended March 31, 2001 and 2002, respectively. The reasons for



                                       8
<PAGE>

this 0.4% decrease are increased insurance costs over the same period in the
prior year and increased labour costs due to inflationary wage increases.

Gross profit margins for our Belize operations decreased from 46.2% to 39.8% for
the three months ended March 31, 2001 and 2002, respectively. The reason for
this 6.4% decrease is related to the settlement costs with Belize Water Services
Ltd. as discussed above.

Gross profit margin for our Bahamas operations for the three months ended March
31, 2002 was a negative 53.8%. This was due to low water sales and a relatively
higher proportion of fixed costs such as depreciation, which we expected in the
early phases of the Bimini Sands Resort development project. Both of these are
temporary factors and are not expected to continue in the future. We forecast
that the Bahamas operation will generate net income during the first quarter of
2003.

Indirect expenses decreased by 7.3% from $647,360 to $600,223 for the three
months ended March 31, 2001 and 2002, respectively.

Our Cayman operations decreased indirect expenses by $50,780 for the three
months ended March 31, 2002. This decrease was offset by small increases in both
the Belize and Bahamas operations. The greatest decreases in our expenses
related to our banking and loan facilities. We are benefiting from low LIBOR
interest rates on our term loan and overdraft facilities with Royal Bank of
Canada, and because the principal on our European Investment Bank loan reduced
because of a payment made on December 21, 2001, we are paying both less interest
and lower government guarantee fees in 2002. Additional saving occurred on our
communication costs due to a new telecommunications service plan offered by our
local provider.

The Belize operations increased indirect expenses by $2,201 for the three months
ended March 31, 2002. This was due to increased insurance costs.

Finally, the addition of the Bahamas operations as of July 11, 2001 increased
indirect expenses by $1,442 for the three months ended March 31, 2002. These
costs relate to the administration of the Bahamas operations.

As a percentage of the Total Income, indirect expenses were at 21.9% and 18.8%
for the three months ended March 31, 2001 and 2002, respectively.

NET INCOME

Net income increased by 11.5% from $830,890 to $926,500 for the three months
ended March 31, 2001 and 2002, respectively. This increase was due to the
several reasons detailed above.

DIVIDENDS

In December 2001, we increased our per share dividend from $0.40 to $0.42 per
year, payable on a quarterly basis. We have consistently paid dividends to
ordinary shareholders since we began declaring dividends in 1985. Our board of
directors has established a policy that we will maintain a dividend pay-out
ratio in the range of 50% to 60% of net income. This policy is subject to
modification by our board of directors, however, we expect to continue
increasing our dividend as our earnings grow.



                                       9
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

We generate cash primarily from our operations in the Cayman Islands, Belize and
Bahamas, and at a lesser frequency from the sale of our shares, and through our
loans and facilities obtained from two banks. Cash flow is impacted by operating
and maintenance expenses, the timeliness and adequacy of rate increases
(excluding automatic adjustments to our rates for inflation and electricity
costs), and various factors affecting tourism in the Cayman Islands, Belize and
Bahamas, such as weather conditions and the economy. We use cash to fund our
operations in the Cayman Islands, Belize and Bahamas, fund capital projects, to
make payments under our operating agreement with Ocean Conversion (Cayman) Ltd.,
a Cayman Islands company which operates our Governor's Harbour plant, to expand
our infrastructure, to pay dividends, to repay principal on our loans, to
repurchase our shares when appropriate and to take advantage of new investment
opportunities which expand our operations.

OPERATING ACTIVITIES

Cash from operating activities for the three months ended March 31, 2001 and
2002 was $676,906 and $590,025, respectively. We generated cash through the
utilization of our existing plants, equipment and resources in all three
segments of the business, minimization of water losses and efficiencies created
by a strong management team. The loss in the Bahamas operation for the three
months ended March 31, 2002 was $12,069. This investment is long-term and we do
not expect to produce a positive cash flow until the second quarter 2002.
Currently, we provide water to 54 condominiums, half of a developing marina and
a small existing hotel. By the end of 2002, we anticipate that we will be
providing water to 30 additional condominiums, and the expanded marina. During
the month of March 2002, our Cayman operations sold approximately 19 million US
gallons more than in the same month of the previous year. This resulted in the
increased receivables for the month of March 2002.

WORKING CAPITAL

At March 31, 2002, we had a working capital surplus of $1,117,975. This surplus
relates to the cash we received from our operating activities and the increased
Cayman operations receivable due to the sales in the month of March 2002.
Currently, 42.0% of our cash is denominated in Belize dollars. Through our
Belize government guarantees we are in the process of repatriating United States
dollars to the Cayman Islands.

INVESTING ACTIVITIES

Cash used in investing activities during the three months ended March 31, 2001
and 2002 was $446,231 and $1,681,993, respectively. Cash was used in investing
activities for expenditures for new property, plant and equipment with the
majority associated with the purchase of the RO seawater conversion plant on
February 1, 2002. We also continued to expand our water distribution system in
the Cayman Islands by constructing pipelines to service new developments within
our franchise area. During the same period in 2001, our investing activities
consisted of construction costs relating to our new water production and
distribution system in Bimini, Bahamas. It also includes expansion costs
relating to our water distribution system in the Cayman Islands by constructing
pipelines to service several new developments within our franchise area.

FINANCING ACTIVITIES

Cash used in financing activities for the three months ended March 31, 2001 was
$150,920, compared to cash provided by of $1,752,815 for the three months ended
March 31, 2002. During the three months ended March 31, 2002, our primary
financing activity was a draw down of our credit facility for an additional
$1,500,000 in order to assist with the financing of the investment of our new RO



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seawater conversion plant plus the increase in our short-term bank overdraft to
assist with US dollar denominated payments of our dividends and supplier
invoices. We also had proceeds from an issuance of ordinary shares of common
stock due to certain directors exercising certain options. These were offset by
the payment of our December 31, 2001 interim quarterly dividend totaling $0.10
per share and a principal payment on one of our term loans. During same period
in 2001, the primary financing activity was the payment of our December 31, 2000
interim quarterly dividend totaling $0.10 per share. This was offset by proceeds
from an issuance of ordinary shares of common stock due to a director exercising
certain options and a net increase in our short-term bank overdraft to cover
some of the construction costs of our new water production facilities in Bimini,
Bahamas.

MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURES

As at March 31, 2002, we had approximately $120,000 committed for capital
expenditures for the construction of pipeline to connect the Britannia plant
facility to our distribution network. We intend to finance our pipeline
construction project using cash from operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not use derivative financial instruments for speculative trading purposes
and as of March 31, 2002 have not been a party to any financial instruments or
contracts that expose us to material market risk.



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<PAGE>


                           PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In March 2002, we issued 27,979 ordinary shares of common stock to two of our
executive officers pursuant to the exercise of stock options. The aggregate
exercise price of the options was $162,835. Also in March 2002, we issued 3,172
ordinary shares of common stock to our Belize managers as a bonus pursuant to
the terms of the Belize managers' employment agreement and we also issued 249
ordinary shares of common stock to three of our directors as compensation under
the directors share grant plan. The issuances of these shares were exempt from
registration under Regulation S promulgated under the Securities Act of 1933
because the shares were offered and sold outside of the United States to non-US
persons (as defined in Regulation S) and under Section 4(2) of the Securities
Act of 1933 because the individuals receiving the shares are sophisticated
investors who have knowledge of all material information about the Company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         EXHIBIT NO.       DESCRIPTION
         -----------       -----------
         None

(b)      Reports on Form 8-K

         None



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<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                         CONSOLIDATED WATER CO. LTD.


                                         By: /s/  Jeffrey M. Parker
                                         --------------------------------------
                                         Jeffrey M. Parker
                                         Chairman of the board of directors and
                                         Chief Executive Officer

Dated: May 13, 2002



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