NEA loans power electric coop upgrades

NEA loans power electric coop upgrades | Daily Tribune

At least 32 electric cooperatives (ECs) across Luzon, Visayas and Mindanao have turned to the National Electrification Administration (NEA) for P1.98 billion in fresh loans to keep the lights on in the countryside, upgrade decades-old power lines, and rebuild systems battered by natural disasters.

Data from the NEA Accounts Management and Guarantee Department (AMGD) showed that capital expenditure (capex) borrowing dominated the loan releases, with 24 coops drawing a total of P982.25 million for network expansion, substation upgrades and system loss reduction projects.

The agency said the projects are expected to improve service reliability and help coops meet growing electricity demand from homes, farms and rural businesses. In many provinces, power distributors are racing to keep pace with economic activity as small enterprises and agro-industrial users expand operations.

Another eight ECs secured P900 million in working capital loans to cushion the impact of rising operating costs and ensure uninterrupted settlement of their power supply obligations, NEA said.

The additional working capital also allows coops to avoid supply disruptions that could result from delayed payments to power suppliers and transmission service providers.

Mindanao, where many coops have been hit by both extreme weather and security challenges, accounted for two notable borrowings — one coop availed both capex and working capital loans, while another received a P100-million calamity loan to rehabilitate power lines ravaged by typhoon “Odette” in 2021.

Power restoration efforts in parts of Mindanao and Visayas continue to demand heavy investment years after the typhoon’s devastation.

“The NEA sets an annual budget for its lending programs to finance various EC projects intended to improve its electrification services, distribution network systems, and rehabilitation of facilities,” NEA said.

The agency originally allocated P1.79 billion this year for regular loan programs. But loan disbursements exceeded the target, reaching P1.88 billion as of end-September, pushing the utilization rate to 104.86 percent — a signal of growing financing pressure among coops navigating rising fuel prices, aging infrastructure and climate vulnerabilities.

NEA’s loan facility remains a key lifeline for 121 electric cooperatives nationwide — its implementing arm in the government’s drive for total electrification — many of which lack access to commercial financing due to credit constraints and disaster risks.