Raising funds a big problem due to DOJ opinion
MANILA, Philippines—State-run National Power Corp. said it needed as much as P39.5 billion to fund its electrification projects in remote and off-grid areas over the next five years.
According to Napocor president Froilan A. Tampinco, the amount will be used to put up new power facilities under the agency’s small power utilities group (SPUG), on top of maintaining the existing facilities that the power firm had earlier put up in these far-flung areas.
Napocor, through its SPUG, is mandated to provide electricity to remote islands and far-flung, inland barangays that are not connected to any of the main grids.
Tampinco admitted that Napocor was finding it difficult to raise funds after it had been barred, through a Department of Justice opinion, from incurring further borrowings and issuances. Napocor’s capacity to provide advances, he added, had also been largely diminished with the privatization of its power-generating plants and contracted capacities.
Napocor now has to rely on marginal revenue from remaining customer sales, government subsidies and the universal charge for missionary electrification, which is being imposed on all power consumers.
Currently, Napocor is asking the Energy Regulatory Commission to reconsider its order and increase to P13.9 billion the approved subsidy for the SPUG, from the P2.76 billion it approved earlier.
However, once approved, electricity bills are expected to increase again as the subsidy will hike the so-called universal charge on missionary electrification (UCME) component to 22.89 centavos per kilowatt-hour.
To further fast-track these missionary electrification projects, Tampinco said Napocor was also offering to prospective investors such projects.
According to Tampinco, the government expects local and foreign investors to pour in as much as P11 billion in fresh investments over the next three years, to put up power projects and other critical energy infrastructure in the far-flung and off-grid areas.
Tampinco said investors were expected to infuse equity into power projects while the state power firm would provide the expertise, and marketing and other services.
Napocor had signed seven agreements with both local and foreign companies for the conduct of feasibility studies in the remote rural areas under SPUG.
In particular, Napocor and the prospective investors are initially eyeing hydropower projects in Oriental Mindoro; natural gas projects in Occidental, Mindoro; and biomass facilities in Lubang, Ticao, Romblon, Kabugao and Batanes.
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