ADB extends availment period for $200-M loan

The Asian Development Bank (ADB) has decided to extend the availment period for a $200-million loan package by another two years.

The amount was earlier earmarked for energy-related projects on the condition that the Electricity Reform bill will be passed into law.

ADB director Vladimir Bohun said the bank has decided to extend the availment of the loan due to the present political condition.

Bohun said they expect the reform to be passed within the next two years based on "promises by certain government officials."

Bohun said the bank was prepared to withhold all financial assistance and loans to power-related project until the bill was passed. At stake was more than $500 million in various types of loans and financial packages mostly for power projects spearheaded by Napocor.

ADB has committed to extend a $100-million loan package for the Leyte-Mindanao interconnection transmission line which will complete the link from Luzon to Mindanao. The project will result in the completion of the national grid.

ADB is Napocor’s biggest lender, accounting for more than $1 billion. Napocor will be privatized with the passage of the reform bill aside from starting a restructuring program for the entire sector.

"Government should help Napocor by assuming the debts and restructuring the power sector in the short term. In the medium and long-term, retiring the debts and obligations will come from privatization proceeds," Bohun said.

He also made it clear that they are interested in extending financial and technical existence to the country’s energy sector especially in transmission and rural electrification. But it would defer any commitments or discussions until the power reform bill is passed into law.

Napocor will need at least $650 million for its national interconnection program or to link the transmission lines of the Luzon, Visayas and Mindanao Grids.