Napocor to tap P5 billion credit facility

MANILA, Philippines — State-run National Power Corp. (Napocor) is looking to tap a P5 billion credit facility from the Land Bank of the Philippines (Landbank) after securing a favorable opinion from the Department of Justice (DOJ), allowing it access to banks’ credit lines to support its operations.

“We are looking at a P5-billion revolving credit facility from the Landbank,” Napocor president and CEO Fernando Martin Roxas said.

“We are currently negotiating on the terms of this credit facility with them,” he said.

According to Roxas, Napocor is expecting a financing deficit of about P10.5 billion this year. “We’re projecting about P2 billion shortfall by next year,” he said.

Napocor is a government-owned and-controlled corporation that performs missionary electrification function through the small power utilities group (SPUG).

It is responsible for providing power generation and its associated power delivery systems in areas that are not connected to the transmission system.

Napocor-SPUG currently supplies 229 missionary areas throughout the country, most of which have yet to attain a 24-hour electric power service.

The Department of Energy had earlier pushed for Napocor to have access to credit lines of banks, with Secretary Raphael Lotilla emphasizing that as an operating corporation, Napocor cannot do without a credit line at all.

DOJ, in an opinion dated Sept. 23, indicated that Napocor is allowed to draw on funding sources other than the universal charge for missionary electrification to fulfill its mandate of energizing the areas in the country that are not connected to the main grid and ensure a stable and reliable power supply in these areas.

The DOJ opinion stated that Napocor has the legal authority to borrow funds or contract loans to fulfill its missionary electrification function in the off-grid areas pursuant to its charter and the mandate established under Section 70 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001.

Lotilla earlier said the favorable opinion would allow Napocor to establish a credit line with local banks, allowing it to manage the fuel price increase that has significantly affected Napocor’s financial position.

Aside from borrowings, Roxas said other options being eyed to improve Napocor’s financial position is the reimbursement of the BNPP advances it has incurred since 2011 amounting to P404 million, as well as approval of the Energy Regulatory Commission of the basic tariff applications and true-up petitions.

“And then, of course, if any other shortfall, we would request the government for more support,” Roxas said.