NEA seeking $57-million loan for rural electrification

MANILA, Philippines - The National Electrification Administration (NEA) is negotiating for a $57-million (roughly P2.5 billion) loan from the Asian Development Bank (ADB) to finance further development in the country’s electrification efforts.

“We are working on a loan from ADB to support our operations,” NEA administrator Edita Bueno said.

Bueno said the loan proceeds would be used to upgrade NEA’s existing infrastructure; loan out for electric cooperatives; and capacity building.

NEA’s debts currently stand at $585 million, or approximately P3 billion.

ADB, the lead financing agency in the Philippine power sector, has provided to the sector nearly a third of its total cumulative lending to the country of over $9 billion spanning 37 years.

In the power sector, it has extended support in the generation, transmission, distribution sectors.

To further support the government’s initiative, ADB is considering to provide assistance in developing countries a financing scheme that will support these energy efficiency and conservation programs. It aims to identify and finance projects that can easily be replicated in the other parts of the country, encourage market-based financing mechanisms, and support projects that could claim carbon credits.

ADB is also considering to provide a standby facility to the winning bidder of the National Transmission Corp. (TransCo) concession.

As generation and transmission will be operated by the private sector when the restructuring is complete, ADB will consider providing support to strengthen the distribution sector in the rural areas to support the government’s rural electrification program.

In December 2007, ADB’s Japan Special Fund provided a $550,000 grant to prepare the Rural Electric Cooperatives Development Project and help the country achieve a 100-percent rural electrification coverage by 2009.

In January 2008, ADB provided a $200-million private sector loan to the winning bidder in the privatized 600-megawatt Masinloc coal-fired power plant, the largest power plant privatized by the government so far.

Similarly, the ADB is also providing a $120-million private sector loan and a guarantee of up to $90 million to Emerald Energy Corp., which won the bidding for the 600-megawatt Calaca coal-fired thermal power plant.