NEA offers P1.7-B loan window for distressed power cooperatives
DAVAO CITY — The National Electrification Administration (NEA) has set aside P1.7 billion as a loan window for cooperatives, especially the 11 that are considered to be experiencing financial difficulty.
In a news conference here last week, Edgardo R. Masongsong, NEA administrator, said the cooperatives, some of them based in Mindanao, may need fresh funding to survive.
“We are working to help them uplift their status. We will not let them collapse,” said Mr. Masongsong.
In Mindanao, distressed cooperatives include some in the Autonomous Region in Muslim Mindanao, particularly the Basilan Electric Cooperative, Inc., Tawi-Tawi Electric Cooperative, Inc., Sulu Electric Cooperative, Inc., Siasi Electric Cooperative, Inc. and Lanao del Sur Electric Cooperative, Inc. (Lasureco).
Lasureco, which operates within area served by the Agus hydroelectric power complex, has about P10 billion in debt, according to government data.
The Agus complex is governmentrun and supplies about 900 megawatts of low-cost power to the Mindanao grid. Before the entry of new coal-fired power plants, it was the source of about two-thirds the grid’s supply.
Mr. Masongsong said the credit standing of these cooperatives is critical as some of them are on the “brink of collapse” due to low working capital and indebtedness to suppliers. The agency classifies them as Category D, those that are having diff iculty in their operations. These cooperatives, he added, must be injected with additional capital to avert failure.
Under the law outlining the NEA’s operations, the Energy department can place these cooperatives under receivership. A provision in the law calls for the NEA “to immediately step in and take over from its board the operations of any ailing electric cooperative. Within a reasonable period after take over, the NEA may convert the ailing cooperative to either a stock cooperative registered with the Cooperative Development Authority or a stock corporation registered with the Securities and Exchange Commission.”
The credit standing of these cooperatives and their lack of expertise in forecasting requirements, which is also true of some other cooperatives with better financial standing, have also affected the plan to implement a wholesale electricity spot market in the Mindanao grid.
Romeo M. Montenegro, technical head of the Mindanao Power Monitoring Committee, earlier said that the NEA must be able to help the cooperatives financially and technically in order for the market to succeed.
Mr. Montenegro said that some of those that have better cash flow do not have the expertise in projecting demand which is necessary for communicating their power requirements to the market operator, the Philippine Electricity Market Corp., when the market starts in June.