IFC facilitates $13.3-million power deal between Olongapo, Cepalco

MANILA, Philippines – International Finance Corp. (IFC), the private sector investment arm of the World Bank, has facilitated a $13.3-million contract for Cagayan Electric Power and Light Co. (Cepalco).

IFC said it helped Olongapo City sell its electricity distribution system to the winning bidder, Cepalco.

The multilateral creditor said it worked with the Olongapo government to mobilize private sector participation in a transparent bidding process for the rehabilitation, management, operation, maintenance and expansion of the electricity distribution utility.

Cepalco, a local power distribution utility, paid 50 percent of the sale price and will pay the remaining amount after the company acquires a new franchise from Congress.

“This public-private partnership deal for Olongapo’s power system addresses the demand for reliable supply of electricity by local people and businesses,” said Olongapo Mayor James Gordon Jr.

“Given the government’s limited resources, it is only through private sector management that modernization and improved services can be achieved,” he added.

Olongapo, located 127 kilometers northwest of Manila, has more than 230,000 residents, many of whom work in the city’s Subic Freeport Zone, with a high demand for power.

“Having an efficient and viable electricity distribution company for a major city like Olongapo is key to the city’s development as it enables it to attract new businesses, which will result in more jobs and a better quality of life for thousands of families,” Jesse Ang, IFC resident representative to the Philippines, said.

IFC is the largest global development institution focused on the private sector in developing countries.

For years, IFC created opportunities for people to escape poverty and improve their lives.

The financial institution provides financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development.

In a time of global economic uncertainty, IFC’s new investments climbed to a record $18 billion in fiscal 2010.