EXHIBIT
10.3

    


    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

     


    

    


    December
8, 2010

    


    Mr. Glen
Laville

    General
Manager

    Water and
Sewerage Corporation

    87
Thompson Blvd.

    P.O. Box
N-3905

    Nassau,
Bahamas

    


    SUBJECT TO
CONTRACT

    


    Dear
Glen,

    


    
      	
              RE:

            	
              Proposal
      to Expand the Blue Hills Seawater Desalination Plant, New Providence,
      Bahamas

            


    

    


    Thank you
for considering Consolidated Water Bahamas Ltd. (CWCO) to further assist the
Water and Sewerage Corporation (WSC). We understand the sense-of-urgency with
the water supply situation and have compiled a staged solution that we are
confident will satisfy your requirements.  Additionally, the CWCO
solution provides additional water supply in close proximity to the island’s
main demand area, thereby possibly reducing non-revenue water (NRW) over an
alternate supply significantly removed from the main demand area.

    


    The
Consolidated Water Bahamas solution will resolve the Arawak Cay barging problem
with an additional 6.0-MIGD production at the Blue Hills
facility.  2.7-MIGD of the 6.0-MIGD will replace the Arawak Cay
barging operation.  * * * * *.  The immediate benefit to WSC
of a Blue Hills expansion is to eliminate the need to relocate the Arawak Cay
facility.  The associated savings are estimated to be $7,000,000.00.  The
WSC water rate will also be reduced resulting in the savings estimated in the
table below.

    


    WSC
Water Savings

    


    *
* * * *

    


    Executive Offices, P.O. Box
1114, Grand Cayman, KY1-1102, Cayman Islands, T: (345) 945-4277, F (345)
949-2957, Email: info@cwco.com

     

    CONFIDENTIAL

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    


    

    


    * * * *
*

    


    This
proposal is subject to finalization in the form of a suitable amendment to the
existing New Providence Seawater Reverse Osmosis Plant Contract dated May 2005
(“the Original Contract”). Please consider the information within this proposal
confidential.

    


    Subject
to execution of a suitable amendment to the Original Contract, that incorporates
an extension of the term to at least twenty

    (20)
years from the end of the existing contract term, Consolidated Water is prepared
to provide the Corporation with additional desalinated water on the following
terms and conditions;

    


    Consolidated
Water scope of supply includes;

    


    
      	
               
      

            	
              1.

            	
              Within
      eight (8) months of contract amendment execution and the Corporation’s
      written Authorization to Proceed, design, procure, fabricate, ship,
      assemble, install and commission a modification of and expansion to the
      existing Blue Hills seawater reverse osmosis desalination plant. The total
      capacity of the plant will become 12.0 million Imperial gallons of water
      per day, with a daily guaranteed delivery to WSC of 10.3 million Imperial
      gallons of water per day (or 10.0 million Imperial gallons of water per
      day, with a daily guaranteed delivery to WSC of 8.5 million Imperial
      gallons of water per day depending on the selected Expanded Plant size).
      The expansion shall be comprised of the existing plant, plus additional
      desalination units, seawater extraction wells, brine injection wells, and
      product transfer system (“the Expanded Plant”). The product transfer
      system shall include all tanks, pumps and associated pipe work up to the
      existing tariff meter, plus an upgraded product transfer pipeline between
      the tariff meter and the Corporation’s reservoirs. The product transfer
      system would not include any additional reservoirs. The Expanded Plant
      will be enclosed in a suitably constructed building that meets all local
      building codes;

            


    

    


    Deliver
water with a chloride content of less than 250 mg/l. The water quality
parameters and the post-treatment system of the Expanded Plant would include pH
adjustment and chlorination only.

    


    
      	
               
      

            	
              2.

            	
              Finance
      the design and construction of the Plant Expansion for twenty (20)
      years;

            


    

    


    
      	
               
      

            	
              3.

            	
              Operate
      and maintain the Expanded Plant, and shall meet all costs of and
      associated with its operation and
maintenance;

            


    

    


    
      Executive Offices, P.O. Box
1114, Grand Cayman, KY1-1102, Cayman Islands, T: (345) 945-4277, F (345)
949-2957, Email: info@cwco.com

       

      CONFIDENTIAL


      
        
           


        

        
           


          
            

          

        

        
           


        

      



    

    


    
      	
               
      

            	
              4.

            	
              Provide
      all chemicals, filters, replacement membrane elements, replacement parts
      and other consumables for the Plant, and maintain an adequate supply of
      spare parts to ensure the reliable operation of the Expanded
      Plant;

            


    

    


    
      	
               
      

            	
              5.

            	
              Make
      every effort to supply the demand of the Customer at all times up to the
      design capacity of the expanded plant, and shall guarantee to provide not
      less than 72.1 million Imp. gallons (or 59.5 million IG depending on the
      selected size of the Expanded Plant) of water to the Customer each and
      every week during the term of the extended
  agreement;

            


    

    


    The Water
and Sewerage Corporation scope of supply includes;

    


    
      	
               
      

            	
              1.

            	
              Provide
      all Bahamas government licenses, permits and other approvals relating to
      the Expanded Plant for the proposed land use, abstraction of seawater from
      the ground, injection of concentrated brine into the ground, and operation
      of the Expanded Plant;

            


    

    


    
      	
               
      

            	
              2.

            	
              Provide
      a site, acceptable to Consolidated Water, for the seawater extraction
      wells and brine injection wells. The feed water extraction boreholes and
      brine injection boreholes shall be no farther than 350 ft. from the
      Expanded Plant;

            


    

    


    
      	
               
      

            	
              3.

            	
              Provide
      a site, acceptable to Consolidated Water, for the Expanded Plant no
      farther than 200 ft. from the existing Blue Hills
  plant;

            


    

    


    
      	
               
      

            	
              4.

            	
              Pay
      all customs import duties (if any) on materials and equipment imported
      into the Bahamas and used to construct and operate the Expanded Plant
      throughout the term of the extended
agreement;

            


    

    


    
      	
               
      

            	
              5.

            	
              Pay
      all invoices issued by Consolidated Water after commissioning of the
      Expanded Plant in accordance to the new unit
  rate.

            


    

    


    Additional
Conditions

    


    
      	
               
      

            	
              1.

            	
              Consolidated
      Water has not provided in this price for a Construction Performance Bond
      during the construction period of the Expanded
  Plant;

            


    

    


    
      	
               
      

            	
              2.

            	
              Diesel
      engine emissions from the Expanded Plant would be the same as those agreed
      for the Blue Hills Plant, and not as per the Original
      Contract;

            


    

    


    
      Executive Offices, P.O. Box
1114, Grand Cayman, KY1-1102, Cayman Islands, T: (345) 945-4277, F (345)
949-2957, Email: info@cwco.com

       

      CONFIDENTIAL

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
 

    
      	
               
      

            	
              3.

            	
              The
      unit rate below does not include an additional environmental assessment of
      the site for the expanded operation. If these additional works were
      required, we reserve the right to adjust our proposed rates to reflect
      those additional costs.

            


    

    


    This
proposal is valid for 90 days, after which period we reserve the right to adjust
the rates to reflect any changes in our costs.

    


    I look
forward to meeting with you in Nassau on Tuesday December 7th, 2010
to discuss the details and execution of this proposal.  Please do not
hesitate to contact me before Tuesday if you have any questions. I believe that
Consolidated Water has demonstrated the very highest level of commitment to the
Corporation and to the Bahamas over the past thirteen years, and I hope that you
will find this proposal acceptable.

    


    I look
forward to talking with you soon.

    


    Yours
sincerely,

    


    /s/ Brent
Brodie

    


    Brent
Brodie

    Director
of Sales & Marketing

    


    
      Executive Offices, P.O. Box
1114, Grand Cayman, KY1-1102, Cayman Islands, T: (345) 945-4277, F (345)
949-2957, Email: info@cwco.com

       

      CONFIDENTIAL