October 17, 2017
THE National Transmission Corp.
(TransCo) has informed the departments of Energy and Finance about its plan to
borrow about P52 billion from the World Bank to fund the interconnection of the
Visayas and Mindanao grids, the head of the state agency said on Monday.
Melvin A. Matibag, TransCo president
and chief executive officer, said he had written a letter to the Department of
Energy (DoE) asking it to endorse a plan to borrow from the multilateral
lending agency.
“We are planning to borrow. We have
presented our proposal,” he told reporters on the sidelines of a power
competition seminar hosted by the Energy Policy and Development Program on
Monday at the Bonifacio Global City in Taguig City.
He said in the letter, he also
informed the department about TransCo’s plan to be the lead implementing agency
of the interconnection project.
Privately-owned National Grid Corp.
of the Philippines (NGCP) previously secured provisional authority from the
Energy Regulatory Commission (ERC) for its plan to handle the project.
TransCo owns the country’s power
transmission assets, which are being operated and maintained by NGCP under a
congressional franchise.
Mr. Matibag said he had also written
the Department of Finance about his plan to borrow from the World Bank. The
move is meant to comply with a requirement to secure approval for borrowings of
that size, he added.
He said he had discussions with the
bank’s representatives, who he said were keen on financing the project at
“almost zero interest” and under a term of 30 years. He said the loan would be
tied with the development of renewable energy, which he said the bank has
funding for.
He cited Mindanao’s dependence on
power from hydroelectric plants when asked about how the interconnection
project would qualify for the World Bank’s renewables funding.
The funding source is the latest
floated by Mr. Matibag, who has the DoE’s support in seeking the endorsement of
the Office of the President on a plan to seek congressional approval to use the
Malampaya fund in financing the interconnection project. The fund is the
state’s accumulated share in the revenue of the offshore Palawan gas-to-power
project.
Asked whether a World Bank loan is a
better option over the Malampaya fund, he said: “It can complement or it can be
stand-alone.”
“If it will take time to get the
Malampaya fund then maybe when we arrange the loan agreement, we can make a
commitment that the payment will come from the Malampaya fund, whatever will be
the terms,” he said.
On Sept. 9, 2017, ERC announced that
it had granted provisional authority to NGCP to implement the project, which
will enable power supply importations among the Luzon, Visayas and Mindanao
grids.
The project, which will cost
P51.6967 billion, covers the linking of the power grids via Cebu in the Visayas
and Dipolog City in Mindanao. The converter stations in Visayas and Mindanao
will be located in Sibonga, Cebu and Aurora, Zamboanga del Sur, respectively.
“The bottomline here is the cost
will not be passed on the consumer,” Mr. Matibag said, adding that NGCP usually
passes on to consumers the cost it incurs in funding transmission projects. — Victor
V. Saulon
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