THE National Power Corp. (Napocor) will borrow an additional P10 billion from the Land Bank of the Philippines (Landbank) on top of the P5 billion it has recently secured to aid the state firm in sustaining off-grid power services.
Napocor President Fernando Martin Y. Roxas said rotational brownouts that were earlier anticipated to happen in SPUG (Small Power Utilities Group) areas were averted because Napocor was able to borrow P5 billion from LandBank.
“Not anymore because we’ve been able to borrow P5 billion,” he said when asked if Napocor reduced SPUG operating hours. “We will add P10 billion from LandBank also. Yes, to buy all of the fuel that we will need,” Roxas said.
Napocor is still securing approvals for the P10-billion credit line from LandBank.
“We already asked for the Monetary Board approval and beginning to apply for the sovereign guarantee. We’re hoping to get it by August or September this year. Hopefully, August this year,” Roxas said.
In January this year, Napocor proposed reduction in SPUG operating hours of SPUG power plants from March 1 to end of this year. It earlier proposed that SPUG plants operating for 24 hours a day be reduced to 15 hours, while those that operate for 16 hours will operate for 12 hours. Those that run for less than 16 hours will run for five hours.
Napocor is mandated to supply electricity to 299 missionary areas or those that are not connected to the grid. These areas are currently powered by diesel plants through the Napocor SPUG program. However, the rising cost of diesel in the international market has affected Napocor’s financial position. Its payables to operate SPUG plants and barges amounted to P1 billion for the November to December 2022 billing period while its payables to new power providers and qualified third parties amounted to P5.5 billion.
Additional funding, reduction in SPUG operating hours, and an increase in universal charge for missionary electrification (UCME) were all considered so Napocor’s operations in off-grid areas could continue.
Roxas earlier said Napocor is targeting to convert all SPUG areas to fully on renewable energy before 2030.
“Hopefully, the first 25 percent would start next year and then work on the rest of the 75 percent after that. Maybe two years to reach the full 25 percent and another four years to reach close to a 100 percent,” he said.
Only two percent of SPUG operations are currently powered by renewables, Roxas said.
He added that Napocor intends to tap different kinds of renewable energy technologies, starting with solar.
In line with this, Napocor has also committed to cease from acquiring diesel-fed generating sets following the directive of the Department of Energy to stop procuring new diesel gensets so as to lessen the corporation’s dependence on fossil fuels.
“This will minimize the losses incurred from rising fuel costs and will eventually make our operations more sustainable,” Roxas said.