- What is The Philippine Rural Electrification Program?
- What is NEA?
- What are Electric Cooperatives?
- What are the NEA Enhanced Lending Program For the ECs?
The Philippine Rural Electrification Program has initiated the lighting up of the countryside from a few hundred households to seven million connections which benefited about 45 million Filipinos in 38 years. The impact of power in rural areas has been reflected in the rise of small and medium industries and in the improvement of lives of rural folks through the availability and use of electric-driven appliances in their homes.
The National Electrification Administration (NEA) is the agency instrumental to the successful implementation of the Rural Electrification Program. It was created on August 4, 1969 through Republic Act 3068 which later became a corporation under the Presidential Decree 269 on August 6, 1973 and has been granted additional power by virtue of Presidential Decree 1645. For 38 years, NEA has undertaken the task of improving the socio economic status of the people in the countryside through total electrification. NEA has provided technical, institutional and financial assistance to the electric cooperatives (EC’s) which in turn undertake power distribution on area coverage basis.
Section 58 of the Electric Power Industry Reform Act of 2001 (R.A. 9136), mandates NEA to strengthen the technical capability and financial viability of the rural ECs as electric utilities and to prepare the said ECs to operate and compete in deregulated electricity market, specifically in environment open access and retail wheeling.
ECs serve as NEA’s partners in the Rural Electrification Program. They have been organized as private, non-stock, non-profit, non-political entities owned and operated by the consumers they serve.
There are 119 ECs operating nationwide that are categorized as A+, A, B C,D, and E, depending on the annual performance rating based on set parameters developed by NEA that includes, among others, collection efficiency, system loss, and payment to power suppliers. ECs are also classified as Mega-Large, Extra-Large, Medium and Small according to the number of consumers they serve, sales they make and kilometers of line that they have constructed.
Financial Assistance of NEA to Electric Cooperatives
- Regular Calamity and Concessional Loans.
- Logistical Loans
- Equity Financing Scheme For EC
- Acquisition of 69KV Lines from NGCP
- Single Digit System Loss
- Enhancement of ECs Capital Resources (Collateral Sharing)
- Restructuring of Loan
- Subsidy Releases
- Power Account Settlement (Working Capital)
- Add-Ons (Housewiring)
- Security Deposit
- Special Retirement Package For Employees.
These are the regular loan releases chargeable to ECs available loan balance for rural electrification/calamity loans. This intends to finance the implementation of programs of ECs in the ARMM, off-grid Island and other critically situated ECS.
Logistical Loans are provided to address the EC requirements of concessional replenishment of support equipment such as radios, audio-visual equipment, computers, vehicles, testing equipment, safety gear, linemen tools and other logistical equipment.
This scheme is provided to finance the equity requirement of ECs in the procurement of distribution equipment and in the implementation of rehabilitation and upgrading projects.
This Loan Program is provided to finance the equity requirement of ECs in the acquisition of 69KV Lines from NPC,/NGCP.
This Loan program is provided to assist the ECs in the reduction of the national average systems loss by at least 1% yearly starting 2004 and attain a single digit level before 2010./p>
NEA’s approval of ECs request on: a) Short term loans from other sources not requiring encumberance of real properties or a substantial portion of their properties (without Collateral Sharing);b) Collateral Sharing covering ECs properties mortgaged to NEA in favor of other non-NEA lender.
This program give the ECs clean slate and to allow them to sustain operations and meet maturing obligations.
This provides financial assistance in the expansion/extension of ECs electric distribution line for barangay/sitios energization program.
This program covers the financing of the ECs arrearages with NPC/NGCP in order to avail of prompt payment discount.
- Short Term Credit Facility (STCP)
This will finance the ECs monthly shortfall on the settlement of power accounts with the NPC and NGCP.
- Stand-by Credit Facility (SCF) For Power Accounts With GENCO’s and Market Operator (WESM).
This intends to strengthen the ECs creditworthiness with the GENCO and the Market Operator.
This Loan Program help finance the housewiring materials and kilowatthour meters of newly connected consumers.
This Loan Program covers the financing of the security deposit requirements of GENCOs, NGCP and WESM.
This program help finance the retirement of employees affected by the reorganization.
All electric cooperatives (ECs) under NEA supervision are qualified to avail loans.
NEA has approved a Policy on Collateral Sharing where the ECs can share Mortgaged Properties to other lending institutions through a Mortgage Sharing Indenture (MSI).
NEA can only release the ECs Contracts of Mortgage only after full condonation of loans or upon written approval by PSALM.
Yes, but it needs prior approval of NEA or PSALM and should be through public bidding and the proceeds should be deposited to an escrow account with DBP or LBP.
Yes, an EC can enter into a donation agreement with NEA or any government units upon written clearance from PSALM.
As provided in RA 9184, NEA may act as guarantor to ECs purchases in the WESM, however, DBM has not yet appropriated the budget for such.