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NEA Releases P794 M Loans to Power Coops

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The demands of the competitive electricity industry require electric cooperatives (ECs) to be operationally strong and viable.

As the agency tasked, among others, to prepare the ECs for this tough scenario, the NEA facilitated the release of P794 M loans to 38 electric cooperatives in the first 10 months of 2011 through its Enhanced Lending Program.

Calamity loan was availed of by Kaelco (P5M), Cagelco II (P3.013M), Iselco II (P12M) and Aurelco (P5M) for the rehabilitation of their damaged distribution system wrought by typhoons “Juan”, “Pedring” and “Quiel”.

Likewise, the Single Digit System Loss Loan was granted to 15 ECs to assist them in the reduction of their annual systems loss by at least 1% yearly and thereby improve system reliability. The EC activities for the reduction of system loss are purchase/replacement of power transformer, meter pole clustering, rehabilitation of defective lines and replacement of defective kilowatt hour meters, and installation of grounding transformers, gas circuit breakers, system power protectors and/or kwh meters. The recipient ECs include Luelco (P24M); Cagelco II, Neeco II-Area, Akelco, Leyeco III, leyeco IV, Camelco and Aselco (P12M each); Aurelco (P10.5M); Lubelco (P5.3M); Capelco and Celco (P5M each); Fibeco (P6.5M); and Moresco II and Daneco (10.7M each).

Eleven ECs have availed loans totaling to P194.759 million as working capital for their operations including payment of power accounts to the National Grid Corporation of the Philippines (NGCP), the Philippine Electricity Market Corporation (PEMC) and their National Power Corporation-Small Power Utilities Group (NPC-SPUG) and prudential requirements and security to the Wholesale Electricity Spot Market (WESM) and Power Sector Assets and Liabilities management Corporation (PSALM) and for the payment of taxes.. Twenty-one other ECs were granted P412.734 million loans to finance their rural electrification projects such as rehabilitation of distribution lines, upgrading of system, purchase and acquisition of logistics support and construction of office building and facilities.

NEA encourages the ECs to avail of its Enhanced Lending Program for the ECs since the loans being offered have competitive interest rate at (9% per annum for loans to be repaid in more than two years and 8% per annum for loans to be paid two year or less). The other features of the program also include that no other charges for term loans; longer repayment period, i.e. from 3-5  or 5-10 years; fast processing period; electronic fund transfer; minimum requirements; assistance in the preparation of Project feasibility Study; and personalized service. NEA’s Accounts Management and Guarantee Department (AMGD) is primarily charged with the marketing, processing and grant of these financial windows.###