IFC brokers power supply deal

The International Finance Corp. (IFC), the investment arm of the World Bank Group, has facilitated a private-public sector partnership to spur development in the country’s rural electrification program.

IFC said it had helped broker a power supply agreement in the Philippines that will benefit about 330,000 people, over half of whom will gain access to electricity for the first time.

Under the terms of the agreement between Basilan Electric Cooperative Inc., a local distribution utility company, and Coastal Power Development Corp., a private power producer that won the competitive bid on the project, Coastal Power will supply 11.8 megawatts of dependable electricity to Baselco, at a cost of P11 per kilowatt-hour from 2010. 

“By signing this agreement, we can guarantee that there will be a significant improvement in the quantity and quality of electricity supply for residents and businesses on Basilan Island. The increase will allow Baselco to meet current and potential demand 24 hours a day, seven days a week at a competitive price,” Ismael Basa, president of Baselco said.

“Coastal Power’s price represents annual savings of more than P50 million from the National Power Corp.’s operating cost because of increased efficiency. This will reduce subsidies and improve our organization’s financial position,” Napocor president Cyril del Callar said.

“Once again, IFC is pleased to partner with the Philippine government and the private sector to facilitate a transaction that will help increase efficiency, provide reliable power to remote islands in Mindanao, and meet the government’s objective of total rural electrification,” IFC resident representative for the Philippines Jesse Ang said. 

“This is consistent with IFC’s strategy to support sectors identified for their high development impact,” he added.

Ang said this initiative was made possible by DevCo, a multidonor program affiliated with the Private Infrastructure Development Group and supported by UK’s Department for International Development, the Dutch Ministry of Foreign Affairs, the Swedish International Development Agency and the Austrian Development Agency.

IFC fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments.

In 2007, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries.