PB allows P9M loan to Celco

CEBU, Philippines - The Cebu Provincial Board has authorized Governor Gwendolyn Garcia to enter into a Memorandum of Agreement with the Camotes Electric Cooperative and the National Power Corporation to address the power shortage in Camotes Island.

The Board granted Garcia the authority during a special session held yesterday following the NPC’s appeal for help from the local government to solve the looming power crisis in the island.

The authority includes the Capitol’s granting of P9 million loan to Celco.

The NPC earlier asked the provincial government’s intervention by helping solve the problem caused by the budget cut in its department.

Garcia met with NPC president Froilan Tanpinco, Celco general manager Rolando Camaso and representatives of Energy Regulatory Board and Department of Energy to discuss the problem.

During the meeting, NPC asked Celco to pay in advance the amount of P4.5 million but Camaso said the cooperative has no capability to pay in advance as they only rely on the payments of the bills from the consumers.

Celco has an average collection of P5 million per month and it has an average payable amount of P3.2 million to the NPC. During the meeting Garcia offered Celco a loan to be paid with minimal interest.

The amount will be used to pay three months advance to NPC.

Celco and NPC welcomed the offer and found Garcia’s benevolence to be the best solution to normalize the power situation in Camotes Island.

The amount of little over P9 million was arrived based on the computed 3,000 liters a day of fuel requirement of NPC at P34 per liter which cost around P3 million per month.

The Province will impose 5.2 percent annual interest rate making Celco to pay the total amount of P9.6 million at P268,596 monthly amortization starting April this year until May next year.

The loan that the province will be granting to Celco however will not guarantee a steady power supply for the island until the yearends because the amount is only good for three months.

The MOA is set to be signed this afternoon by both parties.

The NPC hopes to find other sources of funds within three months to fill in the gap between its budgetary requirement and the approved budget.

“We are giving them the breathing space but of course these will be paid back at a reasonable interest that should be acceptable to all parties,” Garcia said.

During the meeting, it was also agreed not to pass on the interest to the consumers so that this will not result in increase of electricity rates in Camotes island.

Should NPC still cannot find solution within three months, Garcia said she will meet them again to listen from them how to arrive possible direction to pursue. (FREEMAN)