NEA funded P2.53 billion worth of electric cooperatives’ rehab works in 2014

Business World Online
Posted on March 12, 2015 08:33:00 PM

THE NATIONAL Electrification Administration (NEA) extended a total of P2.53 billion worth of funding in 2014 to support provincial power distributors’ rehabilitation and upgrading activities.

A total of 67 electric cooperatives (EC) benefited from the various loan windows last year and utilized the funds to sustain their operations.

The state-run agency said P829 million was borrowed by ECs due to the several typhoons, including Santi and Yolanda in 2013, and Glenda last year.

“NEA processed 84 financial packages vis-a-vis its target of 53 last year,” according to the agency.

It noted that collection efficiency was 100% on the loan amortization due.

“As part of NEA’s mandate, the agency has developed a credit guarantee program and facility for the ECs,” NEA Administrator Edita S. Bueno was quoted in the statement as saying.

The initiative aims to support the ECs in securing power supply via the Wholesale Electricity Spot Market, Interim Mindanao Electricity Market, or bilateral contracts with generation companies.

“NEA also continues to find ways to make funds readily for the ECs particularly in times of natural and man-made calamities for them to serve better their member-consumers”, Ms. Bueno said.

NEA also said eight ECs availed of loans collectively worth P203 million to fund their monthly shortfall for account settlements with generation companies and the National Grid Corporation of the Philippines.

Part of this was also used to finance arrears with their suppliers.

Two ECs -- Pampanga III Electric Cooperative and Camarines Sur I Electric Cooperative -- tapped the stand-by credit loan facility amounting to P30 million and P13.13 million respectively.

Such credit facility aims to strengthen the ECs creditworthiness with their power suppliers.

Davao del Norte Electric Cooperative, Misamis Oriental I Electric Cooperative and Zamboanga City Electric Cooperative borrowed a total of P137.15 million for the procurement of modular generator sets in preparation for the possible shortfall this dry season.

Five other ECs, meanwhile, used the Single Digit System Loss Loan Facility to improve their distribution facilities, which in turn could help curb their system losses. The other amounts of borrowings not specified.

In September last year, NEA’s Board of Administrators approved the reduction in NEA’s lending rate on term loan approvals.

For the two-year repayment period, the lending rate was cut to 6% from 8% per year; while the three-to-fifteen repayment period carries a rate of 6.5% from 9%. -- Claire-Ann Marie C. Feliciano source