The NIA obtained the fund through a soft loan from the Japanese government with a 2.2 percent annual interest that will be paid in five years.
According to Jesus Emmanuel Paras, administrator of NIA, the existing tunnel structure of the Bago River irrigation system has nearly reached its estimated 50-year life span, resulting to inadequate water delivery to farmlands, and thus, needing urgent repair.
"Once completed, 12,700 hectares of rice lands and 500 hectares of sugarcane land will be fully irrigated," Paras said in a pledging ceremony yesterday.
The completion of the project shall benefit over 5, 000 farmers in three cities and four towns in the province.
Under the Bago River Irrigation System Rehabilitation and Improvement project, a second conveyance channel will be constructed while 31 kilometers of the main canal and 95 kilometers of the secondary canal will be concrete-lined.
NIA plans to begin the project by November, targetting its completion in 2007.
The Bago River irrigation system project is part of the 25th Yen Loan Package pledged by the Japanese government this year. It also involves systems rehabilitation and improvement upgrade of water management, institutional development and watershed management.
In his speech, Japanese Minister Yoshiyuki Sadaoka said the project would surely help boost agricultural productivity in Region 6 where the irrigation system is located.
"The rehabilitated system will provide local farmers and related industries with better opportunities than before," Sadaoka said.
In the same forum, Paras acknowledged the role of the Japanese government in helping the country with its agricultural development programs, stressing that the Japanese government has, for many years now, been the Philippines’ biggest foreign partner in financing irrigation development projects in the countryside.
The Japan Internatioal Cooperation Agency (JICA) and the Japan Bank for International Cooperation (JBIC) have financed eight other irrigation projects costing P17.12 billion, including those in Casecnan, Pampanga Delta, Bohol and Catubig.