Gov’t eyeing loan program for Mindanao power coops

MANILA, Philippines - The government is eyeing various short-term solutions to address the power crisis in Mindanao, including a loan program that will allow electric cooperatives to acquire their own modular generator sets.

In a meeting with Mindanao-based electric cooperatives, Energy Secretary Carlos Jericho Petilla said President Aquino approved the loan program amid the blackouts triggered by the power shortage in the Mindanao grid.

Petilla said electric cooperatives could have their own modular generator sets through rentals from private suppliers, commercial financing and loan from the National Electrification Administration (NEA).

Petilla said that based on the computation of the Department of Energy, the rental option would translate to an electricity rate of P9.56 per kWh. The amount  is based on the rental fee of a generator set of P1.4 million per megawatts and the estimated fuel cost of P41 per liter for diesel fuel.

Acquisition through commercial financing will translate to a new rate of P8.45 per kWh. It is estimated to cost P22 million per MW, with a two-year warranty.

The cheapest option is through financial assistance from NEA, which would translate to an electricity rate of P8.09 per kWh.

Petilla said the government would provide loan assistance to NEA, which in turn will establish a trust fund.

From the trust fund, NEA will provide loans to electric cooperatives to acquire  generator sets with a proposed interest rate of six percent.

Petilla said the government could set aside P4 billion for the trust fund, which would come from the proceeds of the Malampaya deep-water-to-gas project.

“Electric cooperatives will have the responsibility to operate the generator set, procure fuel and bear operating and maintenance costs,” Petilla said.

He said he expects the  blackouts to be reduced from eight to two hours.

Petilla said the power crisis would persist beyond 2015 if no new power plants will be built.