DBP sets $25-M credit line for maritime, environment

The Development Bank of the Philippines (DBP) will extend a $25-million credit facility from the Export Finance Corp. of Norway (Eksportfinans) and Norwegian Agency for Development Corp. (Norad) to finance projects in the maritime and environment sector.

Based on the amended credit line agreement, the loan facility will be used for "mixed credit financing on a per contract basis for delivery of capital goods and services from any country of source."

The original agreement, signed in July 1996 and twice amended since, stated that the purpose of the facility was "for re-lending on retail basis to finance up to 100 percent of the contract price for Norwegian goods and services, and with 70- percent Norwegian content for projects of maritime and environmental sector."

Under the new accord, the repayment terms are based on the "differentiated discount rate (DDR) plus two percent per annum, or six months Libor/Euribor plus two percent per annum, whichever is higher."

Under the government’s Sustainable Logistics Development Program (SLDP), the DBP helps in raising credit for the country’s basic infrastructure for the efficient movement of basic commodities through the introduction of modern storage handling and transport systems.

The SLDP has three major components namely, the establishment of a grains highway, a road ro-ro (roll on, roll off) ferry network, and a cold chain.

DBP will provide the medium-and-long-term development loans to the private sector and local government units for various projects such as ro-ro vessels, ro-ro ports, processing and marketing centers, aggregating centers, reefer transport equipment, and bulk terminals, handling and transport equipment.

It also has a program for the development of the country’s maritime industry or the Domestic Shipping Modernization Program. It has a credit facility of ¥15-billion under the lending program of the Japan

Bank of International Cooperation (JBIC). Repayment periods range from a minimum of three years to a maximum of 15 years. Computation of the loan repayment largely depends on the project’s cash flows.

The loan facility is available either through the DBP or private commercial banks accredited by DBP and classified by the government financial institution as participating financial institutions (PFIs).

All loan applications must go through stiff screening and review by the project team composed mainly of DBP personnel. Also assisting them are representatives from the Shipping Development Corp. (Shipdeco) of Norway and the Overseas Shipping Cooperation Center (OSCC) of Japan. Both agencies are also available for technical assistance.