ADB to lend RP $500 M in energy loans

The Asian Development Bank (ADB) has scheduled a total of $500 million in energy-related loans to the Philippines from 2000 to 2002.

Topping the list of projects that will be funded by the loans is the $100-million rural electrification program of the government through the Department of Energy (DOE) and the National Electrification Administration (NEA).

Another $100 million has been allocated for the ambitious Leyte-Mindanao interconnection transmission line project being undertaken by the National Power Corp. (Napocor). The entire project cost is $500 million which will also involve other financial institutions like the Japan Bank of International Cooperation (JBIC).

Some $300 million will be spent on various energy-related projects and technical support loans such as energy consultants in restructuring, privatization and the hike.

According to ADB board director Patrick Thomas, the bank wants to be a major player in the Philippine energy sector.

"We are not easing on being involved in energy-related activities, and we are also interested in the new and renewable energy (NRE) sources activities," Thomas said during the Asia Energia 2000 forum sponsored by the European Chamber of Commerce of the Philippines (ECCP).

The ADB executive said the bank has issued 27 loans totalling $2.2 billion for energy-related activities. Among their biggest borrower is Napocor, several independent power producers (IPPs), including activities in transmission, distribution and power generation.

It has likewise extend $10 million in technical support for studies or reviews in the areas of rural electrification, tariff regulation, geothermal surveys, and natural gas pricing studies.

Meanwhile, the Development Bank of the Philippines (DBP) announced that it has formed a program solely focused on the development of NREs. Called the DBP Finesse project, it has the financial backing of the DBP with a pledge of support from the Danish government.

The project already has several NRE projects in the pipeline while several NREs project studies and upgrading programs are already receiving DBP attention.

DBP vice president Eufemia C. Mendoza said the program will initially receive $180,000 not only from the Danish government but also the Organization of Petroleum Exporting Countries (OPEC) through the United Nations Development Programme.

"So far, the bank has already extended some P13 billion for 41 borrowers in the energy sector," Mendoza told the mostly-European based energy firms and creditors. Funding sources of these projects came from the Overseas Economic Cooperation Fund (OECF), the JBIC, International Bank for Reconstruction and Development, Social Security System (SSS), the Land Bank of the Philippines (LBP), and the DBP’s Window III.

Among the principal recipients of the DBP-assisted loans are the Manila Electric Co. (Meralco), 11 rural electric cooperatives, power generation companies, and power generation equipment trading companies.