MANILA, Philippines – State-run National Electrification Administration (NEA) has opened a loan window for renewable energy (RE) projects to encourage the development and usage of cleaner sources of power among electric cooperatives (ECs) within their franchise areas.
According to NEA, the new loan window seeks to finance not only the equity requirement for the development and construction of RE projects but also the cost of repairing or rehabilitating existing RE facilities of the power coops.
The RE loan window aims to scale up the capacity of the ECs to construct, acquire, own, operate, and maintain generating facilities within their franchise areas as mandated by Sec.9 of RA 10531 or the National Electrification Administration Reform Act of 2013.
“NEA is broadening the range of financing options for the ECs to guarantee their ability to provide quality and reliable power supply to their member-consumers,” said NEA officer-in-charge Sonia San Diego.
“We have established the RE loan window, in particular, to encourage ECs to adopt embedded sustainable energy solutions, like solar farms, solar PV rooftops, mini or micro-hydro power generation systems, and small-scale wind and biomass projects, following the policy of the State to accelerate the exploration, development, and utilization of RE resources as stipulated in RA 9513, or the Renewable Energy Act of 2008,” San Diego said.
For new projects, ECs can secure loans of up to 30 percent of the total project cost but not exceeding P100 million.
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Meanwhile, maximum loanable amount for repair or rehabilitation of existing RE facilities is P60 million.
The RE loan window offers a six percent interest rate per annum or NEA prevailing interest rate at the time of drawdown and 4.5 percent interest rate during grace period.
It also applies a 12 percent default charge per annum, and has maximum 15 years repayment period and maximum three years grace period. Validity period is three to five years.
San Diego also said the new loan option for RE will reduce dependence of ECs on fossil fuels and cushion them from price fluctuations in the international markets, thereby balancing the goals of economic growth and protection of public health and the environment.