JBIC, a ranking Napocor official said, allowed the extension for the drawdown of the loan which was supposed to expire this month.
But the Napocor official, who requested anonymity, declined to say up to when Napocor can disburse the loan from the Japanese financial institution.
JBIC has been asking Napocor since early 2001 to speed up the loan disbursements of the bank-funded projects amounting to a total of ¥38.02 billion.
Aside from the Tiwi geothermal project in Albay, JBIC is also supporting other projects of Napocor such as the Makban geothermal rehabilitation in Laguna, ¥6.63 billion; Leyte-Bohol Interconnection which will close in July 2003 with total project cost of ¥8.86 billion; and Luzon Grid transmission projects associated with the Ilijan project, closing on July 2004 with project cost of ¥14.97 billion.
The change in administration early last year caused the delay in the implementation of the Tiwi rehabilitation project.
The Tiwi rehabilitation project started to face delays in implementation when the National Economic Development Authority (NEDA) under the Arroyo administration questioned the approved partial rehabilitation of the geothermal plants, prompting Napocor to stop the project temporarily.
The NEDA officials were curious about the decision of Napocor to push through with the partial rehab while it was under the loan approval that the project should be done in full. But Napocor had already informed NEDA officials that the partial rehab was already approved by JBIC.
Even the winning bidder for the partial rehab contract of the geothermal plant, Marubeni Philippines Corp., also supported Napocor’s decision to conduct a partial rather than a full rehab.
Marubeni pointed out that a performance guarantee from their company ensures that partial rehab would enable it to bring the said geothermal plant’s performance to 100 percent. This means that Marubeni assures that if ever the plant is not able to perform 100 percent after the partial rehab, the company will work to make it reach the guaranteed level.
According to Marubeni, a full rehab will entail an additional cost of $25 million which will be a burden for Napocor considering the state-owned firm’s current financial performance.
The Japanese contractor also noted that the full rehab of the Tiwi geothermal plant will take more time and thus conflict with Napocor’s plan to sell all its generation assets in the second quarter of 2002.
Marubeni said in case Napocor decides to conduct a full rehab of the plant, it will also take time since it will have to be approved again by NEDA and it has to renegotiate for the price and scope with Marubeni and Mitsubishi, the winning bidder for the partial rehab of the plant.
It was noted that the concept of a partial rehabilitation was arrived at taking into consideration the financial standing of Napocor.
In March last year, Marubeni bagged the ¥4.24 billion (P1.7 billion) contract for the partial rehabilitation of the state-owned power firm’s Tiwi geothermal power plant complex in Albay. But the contract was suspended pending the results of NEDA’s review.