TransCo seeking AIIB, World Bank loans to cover backlog in FiT payments
NATIONAL Transmission Corp. (TransCo) has approached multilateral lending institutions Asian Infrastructure Investment Bank (AIIB) and World Bank for a loan of between P15 billion and P20 billion to pay renewable energy developers that have yet to receive their share of the feed-in-tariff (FiT) allowance collected from electricity consumers.
“I’m talking to AIIB and World Bank if they can loan us at zero interest,” Melvin A. Matibag, TransCo president and chief executive officer, told reporters.
“I’m looking at P15-P20 [billion],” he said, adding that his proposal is for a zero-interest loan with a repayment period of 30 to 40 years.
TransCo is the designated administrator of the uniform charge billed to all on-grid power users. The collection, called the FiT-allowance in consumers’ electricity bills, is used to pay renewable energy developers for their biomass, run-of-river hydro, solar and wind projects. The tariff is meant to accelerate the exploration and development of clean energy sources and encourage the use of renewable energy to reduce greenhouse gas emissions.
Dinna O. Dizon, manager of TransCo’s compliance monitoring department, said P8.1 billion in FiT remains unpaid after the agency paid out 72% of the P30 billion due to renewable energy developers.
She disclosed TransCo’s proposal on Thursday during the Second Philippine Hydro Summit and Exhibition at the Makati Diamond Residences in Makati City. Both officials attended the event.
Mr. Matibag said he held talks with China’s AIIB and the World Bank for the long-term loan. He said both financial institutions have “untouched” funds set aside for renewable energy projects. He added that TransCo can put up its FiT-allowance collections in the coming years to demonstrate its capacity to pay.
He said the proposal was “approved in principle” by Energy Secretary Alfonso G. Cusi. He also said Finance Secretary Carlos G. Dominguez III “welcomed” the idea.
“I’m preparing the memo. Maybe by the end of the month, I’d be able to finish it,” Mr. Matibag said, when asked about the status of his proposal.
He said the unpaid FiT had accumulated in part after the Department of Energy increased the installation target for solar power projects to 500 megawatts (MW) from 50 MW, leaving more developers billing TransCo for their guaranteed FiT. He said the amount he was planning to borrow allows for some buffer.
The backlog was also worsened by the delay in the approval of the rate of FiT-allowance collected from electricity users, which TransCo applies for yearly. The Energy Regulatory Commission (ERC) has yet to approve TransCo’s application for a 22.91-centavo per kilowatt-hour (kWh) FiT-allowance for 2017.
Ms. Dizon said TransCo’s application for 2017 is subject to change.
“Our updated calculation based on more recent billing data, generation data, the amount that came out is 27-28 centavos per kWh, but it’s up to ERC to appreciate that,” she said. “As far as I know, more or less they will come out with the decision three months after the last hearing date. We have the final hearing next week.” -- Victor V. Saulon