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METROPOLITAN Bank and Trust Co. announced on Tuesday that it has
engaged the services of the International Finance Corp. (IFC), the
World Bank’s private-sector lending arm, as advisor in extending
loans to rural electric cooperatives nationwide.
In a statement, the country’s biggest lender
said it entered into power distribution financing to maintain market
leadership and support the sector. “With IFC’s expertise and
track record in the power sector, both globally and locally, we hope
to gain a better understanding of electric cooperatives so we can
better serve their needs,” Vicente Cuna Jr., Metrobank executive
vice-president, said.
In a study, the IFC said electric cooperatives
need medium- to long-term financing of an estimated $1.3 billion for
the next 10 years to replace capital equipment already 20 to 30
years old.
The World Bank unit launched a rural
electrification program co-funded by Australia and Canada to
strengthen the capacity of electric cooperatives in Mindanao to
achieve their operational, financial, and regulatory objectives.
Under the program, IFC will work with a number of electric
cooperatives to create demonstration cases and project templates
that can be shared in other parts of the country.
Earlier, the IFC was tapped by the Bank of the
Philippine Islands (BPI) to provide assistance in building up its
sustainable energy-financing portfolio. The World Bank unit
estimates that a P40-billion market for this kind of lending in the
country that commercial banks have yet to explore.
Through the agreement, BPI would expand its
financial products by opening up opportunities for micro-, small-
and medium-scale enterprises to improve the energy efficiency of
their operations. Loans may be used to purchase capital equipment
like cooling systems, as well as production machinery and lighting
systems that are more energy-efficient.
IFC earlier said for the fiscal year 2008 it
would increase its loan exposure in the country by almost four times
from $130 million to $500 million in anticipation of more
infrastructure projects requiring funds.
It may also sell five-year bonds of up to P5
billion this year after it threshes out the details of the debt
issuance, especially the issue of taxation, with several regulators
and agencies like the Department of Finance and Bureau of Internal
Revenue, the Bangko Sentral ng Pilipipinas and the Securities and
Exchange Commission.
-- Likha C. Cuevas-Miel
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