Spain to fund missionary electrification projects

The Department of Energy (DOE) has signed a memorandum of understanding with the Spanish government for the funding of the missionary electrification projects of the National Power Corp. (Napocor)’s Small Power Utilities Group (SPUG).

The SPUG has nominated at least 10 missionary electrification projects to be funded under the Spain-Philippines Protocol.

The MOU was signed by the DOE, and Napocor and Expansion Exterior (Exex), a Spanish state-owned company specializing in providing intermediation commercial services, foreign specialized consultancy and financial structuring of projects on behalf of Spanish export companies.

Under the MOU, Napocor will determine the necessary capacity additions eligible for funding.

Napocor will also provide the necessary staff during the preparation of the feasibility studies that will be conducted by Exex to determine the financial and economic viability of the proposed projects.

So far, SPUG has identified 10 projects eligible for financing, by including four that are scheduled for implementation in 2005. These are the 10,000-kilowatt Mindoro wind farm project, the 5,000-kW Marinduque hybrid system, the addition of 2,000 kW and 1,000 kW, respectively, to the Camotes diesel power plant in Cebu and the Ticao diesel power project in Masbate.

For implementation in 2006 are the 5,000-kW Catanduanes and Masbate hybrid systems, the 1,000-kW Romblon hybrid system, the 150-kW Batan diesel power project in the Bicol region, and the expansion of the capacity of the Casiguran diesel power plant in Aurora and the Agutaya diesel power plant in Palawan by 1,000 kw and 150 kw, respectively.

For its part, Exex will propose and support the financing requests of Napocor for the SPUG projects under the Spanish protocol.

Exex will also coordinate with the Philippine authorities to facilitate the approval of the required funding.

Under the MOU, Napocor will be asked to submit the completed feasibility studies to the National Economic and Development Authority, along with their application for funding by Spanish proponents.

For its part, the DOE will provide the policy direction, guidelines and oversight function in the overall implementation of the projects.

Under the Electric Power Industry Reform Act (EPIRA), SPUG is mandated to provide electricity in areas not yet connected to the transmission system by drawing funds from its revenues or other funding sources, including multilateral aids or grants.