THE Asian Development Bank (ADB) has earmarked $50 million to $100 million in assistance to the National Electrification Administration (NEA) that will be used to improve the financial and technical capabilities of the country’s 118 electric cooperatives.

“The assistance is aimed to provide support to electric cooperatives by improving their distribution system and to prepare them to participate in the Wholesale Electricity Spot Market (WESM), which is already in the pipeline for the year,” said Zhai Yongping, principal energy specialist of the ADB Southeast Asia Infrastructure Division.

Prior to the disbursement of $50-million to $100-million loan programmed next year, the ADB official said ADB will provide a grant of $1 million that will finance an analysis report on the electric cooperatives’ detailed technical, financial, social and environmental analysis.

Yongping said the grant and assistance will provide the much-needed public sector support to the electric cooperatives in improving their operational efficiency and prepare them to participate in the WESM.

“The loan amount will depend on how much the NEA will need. We have also been closely working with the Department of Energy, Department of Finance and the National Economic Development Authority,” said Yongping. He added the loan will mostly likely be for 15 years with a three- to five-year grace period. ADB is also working that the loan be designed to either be in peso or dollar denomination.

Yongping added that he expects the $1-million grant to be approved within the year and the study to start shortly after the release of the grant, which will be done in eight months.

Afterwards, according to Yongping, the loan can be availed upon completion of the study in early next year and have the first of its kind peso-denominated assistance to NEA before the end of 2008.

The ADB loan to NEA will be used to strengthen the technical and financial capability of the electric cooperatives to provide quality and affordable service to its customers.

Under the ADB project prospectus, the loan can also be used to provide financing to electric cooperatives to upgrade the distribution system and acquire subtransmission systems of the National Transmission Corp. (Transco) and enable them to participate in the WESM.

ADB said the proposed ADB project preparation technical assistance is consistent with the bank’s country and strategy program and ongoing support to the power sector restructuring.

In December 2006, ADB approved the Power Sector Development Program (PSDP). The main objective of the PSDP is to create a competitive power sector through privatization of National Power Corp.’s (Napocor) generation assets and concession of Transco’s assets.

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THE Asian Development Bank (ADB) has earmarked $50 million to $100 million in assistance to the National Electrification Administration (NEA) that will be used to improve the financial and technical capabilities of the country’s 118 electric cooperatives.