Napocor eyes new loans for fuel procurement

MANILA, Philippines - The state-run National Power Corp. (Napocor) is seeking again to have the authority anew to borrow on its own for its fuel procurement requirements, its top official said.

In an interview with The STAR yesterday, Napocor president Froilan Tampinco said their  fuel requirements could reach up to P10 billion a year.

“When we do fuel procurement we can start the bidding process by having confirmation of budgetary inclusion. We really need to have the ready cash to be able to pay and have the deliveries done on time,” he said.

He also said that if Napocor would again have the authority to borrow, it could avert fuel shortage in off-grid areas.

“The borrowings can also be used for acquisition of valuable spare parts as part of preventive and maintenance measures of some 100 plants,” Tampinco said.

He said Napocor could pay off the loans using proceeds from its Universal Charge for Missionary Electrification (UCME).

Tampinco said the Electric Power Industry Reform Act (EPIRA) does not state that Napocor could no longer borrow on its own. He said the Department of Finance (DOF) could give Napocor the authority to borrow.

Congress may also amend the EPIRA to give Napocor the flexibility to tap loans or issue bonds on its own.

Napocor is no longer allowed to approach lenders because of a legal opinion issued by the Department of Justice on Napocor’s Small Power Utilities Group (SPUG).

Tampinco, who has tendered his resignation due to personal reasons and will be leaving Napocor by Aug. 1, has instituted reforms on fuel procurement procedures on the back of fuel shortfalls in some areas covered by Napocor’s SPUG.

A key measure includes the acceptance of a certificate of budget inclusion (‘CBI’) in lieu of a certificate of funds availability (CFA) to jumpstart the procurement process. Previously, Napocor’s Bids and Awards Committee prescribed that the bidding process for procurement of supplies and services could start only upon issuance of a CFA.