TALAVERA, Nueva Ecija—Land Bank of the Philippines (LandBank) announced it has granted loans in 2013 and 2018 totaling P1.15 billion under the bank’s Renewable Energy Program (REP) to a waste-to-energy power plant in this province.
This, the state lender said, was extended to help Green Innovations for Tomorrow Corp. (GIFTC) in its bid to establish a biomass power plant that would generate electricity for households in the province.
According to LandBank, the company has carried out an economical and sustainable solution to address the problem of agricultural waste in this province—recognized as the “rice granary” of the Philippines—by converting rice husks as biomass into renewable energy.
With rice production as the major source of livelihood in this palay-producing town, large volumes of rice husks are regularly being disposed of or burned in open fire, posing both environmental and health hazards to the community.
The state lender said part of the loan it extended to the company bankrolled the construction of GIFTC’s biomass power plant in 2016, which is currently operating at a capacity of 10.8 megawatts electric (MWe).
The rest of the loan was allocated for the reimbursement of cost utilized for warehouses, dormitories and other structures, replacement or repair of power plant parts, permanent working capital, including the acquisition of rice husk.
“LandBank was the first financial institution that believed in GIFTC’s vision for a sustainable future for our town, and for the whole country,” GIFTC Assistant Chief Operating Officer Martin O. Vendivil was quoted in LandBank’s statement as saying. “We wouldn’t be where we are now if it weren’t for their assistance.”
Through the services of a grid operator, GIFTC’s biomass power plant can supply electricity to an estimated 6,480 households in selected municipalities and cities in Nueva Ecija, including other areas in neighboring provinces.
The GIFTC power plant consumes around 480,000 kilograms of rice husks per day bought from rice mills in the area, significantly decreasing agricultural waste in the town. More importantly, the energy corporation helps reduce the emission of greenhouse gases, while preserving the country’s natural resources by manufacturing a renewable energy source.
LandBank President and CEO Cecilia C. Borromeo said through the statement the lender “fully supports projects that harness the potential of renewable and alternative energy resources.”
“We will continue to work with development partners in preserving our environment and promoting climate change adaptation,” Borromeo added.
Through LandBank’s REP, the state-run lender aims to finance the development of renewable energy sources and increase access to reliable, clean and sustainable power to help mitigate the effects of global warming and climate change in the country.
Eligible borrowers such as electric cooperatives, local government units, government-owned and controlled corporations and government agencies may borrow up to 90 percent of the total cost of the project.
Cooperatives, associations and private borrowers categorized as single proprietorships, partnerships, or corporations may also borrow up to 80 percent of the total project cost under the Program.
Term loans for working capital and project preparation are payable up to five years with a 6-month grace period on principal payment, while loans for capital expenditure are payable based on the borrower’s cash flow up to 15 years, with a 3-year grace period. The interest rate shall be based on the prevailing market rate but not lower than 5 percent per year.
As of March 31, 2022, Landbank has approved loans totaling P20.1 billion to 56 borrowers nationwide under the REP, “underscoring the bank’s thrust of promoting sustainable finance and development.”
Image credits: Land Bank of the Philippines