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By Euan Paulo C. Añonuevo, Reporter
The power sector may get the bulk of the total
funds of the Asian Development Bank (ADB) that are available to
finance Philippine development projects in 2008.
On the sidelines of the 2008 Philippine Energy
Summit, ADB Deputy Director General Thomas Crouch on Tuesday said
the multilateral lender is thinking of setting aside $700 million
for lending this year. That amount is about the same level as the
bank’s total financing facility for the Philippines in 2007.
ADB money is “going to agriculture, health
sector support, policy sector reform program, which is support for
public expenditure management,” Crouch said. “This is for this
year, and these are the areas where we are looking at to support.”
For the power sector, he said ADB is working
closely with the Department of Energy for a $30-million support
facility for renewable energy, energy-efficiency projects and the
carbon market.
The ADB is also looking at possibly allocating
$250 million, to be included in its programmed lending facility for
the year, as a support facility for the privatization of the
National Transmission Corp. (TransCo) as well as a lending window
for winning bidders of the government’s power sector privatization
program.
Crouch said the bank has recently opened such
facility for the winning bidder of the 600-megawatt Masinloc
coal-fired power plant in line with this.
“We have offered some financing there if the
winning bidder is looking for some support,” he said. “So in the
whole privatization process, we have been very heavily involved
in.”
Crouch added that the ADB will continue to be
“broadly” involved in the privatization process, the Wholesale
Electricity Spot Market (WESM) and the strengthening of the
regulatory environment.
“The sale of assets and the recycling of those
funds to pay down debt in the power sector is a very important part
of the overall macroeconomic strategy ... and not just the power
sector itself, but also equally, perhaps more importantly, from the
macroeconomic stability point of view,” he said.
In December 2007, ADB has announced that it is
lending $450 million to help stabilize the power situation in the
Philippines and restructure the power sector.
These factors are considered crucial to
improving the country’s fiscal imbalance and investment climate.
The stability of the power supply is important
in attracting investments, since investors are put off by power
outages and high electricity rates on account of occasional repairs
done by power plants.
ADB has also drafted a Power Sector Development
Program for the country to build up the sector’s financial
viability. High levels of debt now burden the sector.
The bank has also expressed interest to assist
the government in ongoing efforts to privatize state-owned power
systems, and introduce a competitive electricity market to decrease
unsustainable subsidies to the power sector.
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