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Napocor can now get credit lines from banks

Richmond Mercurio - The Philippine Star
Napocor can now get credit lines from banks
The Department of Energy (DOE) said the DOJ, in its Opinion  20, Series of 2022, dated Sept. 23, indicated that Napocor is allowed to draw on funding sources other than the universal charge for missionary electrification (UCME) to fulfill its mandate of energizing areas in the country, which are not connected to the main grid and ensure a stable and reliable power supply in these areas.
STAR / File

MANILA, Philippines — The Department of Justice (DOJ) has allowed state-run National Power Corp. (Napocor) to borrow from banks to support its operations.

The Department of Energy (DOE) said the DOJ, in its Opinion  20, Series of 2022, dated Sept. 23, indicated that Napocor is allowed to draw on funding sources other than the universal charge for missionary electrification (UCME) to fulfill its mandate of energizing areas in the country, which are not connected to the main grid and ensure a stable and reliable power supply in these areas.

The DOJ opinion, stated that Napocor has the legal authority to borrow funds or contract loans to fulfill its missionary electrification function in the off-grid areas pursuant to its charter and the mandate established under Section 70 of Republic Act No. 9136 or the Electric Power Industry  Reform Act of 2001 (EPIRA).

“The favorable opinion will allow the Napocor to establish a credit line with local banks that would enable it to manage the fuel price increase that has significantly affected  Napocor’s financial position,” Energy Secretary Raphael Lotilla said.

Lotilla said the DOJ’s favorable opinion would also finally enable the Napocor, after two decades, to ramp up renewable energy sources in the off-grid areas and improve island-wide transmission in the major off-grid islands, particularly through public-private partnership (PPP) arrangements.

“The funds of Napocor sourced from the UCME is not sufficient to support Napocor’s current operation. This underlines the efforts of Napocor’s board and management to ensure timely payments to Napocor’s new power providers,” he said.

The DOE has pushed for Napocor to have access to banks’ credit lines as it pursues its mission of bringing light to far-flung islands and communities in the country.

Section 70 of the EPIRA states that Napocor shall remain as a national government-owned and-controlled corporation to perform the missionary electrification function  through the small power utilities group (SPUG) and shall be responsible for providing  power generation and its associated power delivery systems in areas that are not  connected to the transmission system.

Napocor-SPUG is currently supplying 229 missionary areas throughout the country, most of which have yet to attain a 24-hour electric power service.

Lotilla assured the public that with the oversight agencies in the Napocor board led by the secretary of Finance as board chairman and the DBM and the NEDA as members, the necessary controls are now in place under the EPIRA for the judicious use of the power to contract loans.

“We express our appreciation to the DOJ for this very timely news. We are also grateful for the support of the entire Napocor board, particularly the Department of Finance as chairman, the Departments of Budget and Management, Agriculture, Environment  and Natural Resources, Interior and Local Government, Trade and Industry, and the National Economic and Development Authority as members,” he said.

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