NEA extends loan payment of power co-ops
By Jordeene B. Lagare – July 10, 2020
from The Manila Times
ELECTRIC cooperatives (ECs) are given until this month to pay off their loans with the National Electrification Administration (NEA) as the country continues to reel from the impact of the lockdowns imposed to contain the spread of the coronavirus disease 2019 (Covid-19) in the country.
NEA Administrator Edgardo Masongsong, in the agency’s Memorandum 2020-033, said the payment deadline for loan amortization of power co-ops has been extended to July 30 from June 30.
It covers the loans taken out by ECs that are due in the second quarter.
The relief measure is in consideration of the declaration of a state of calamity in the country under Proclamation 929 due to the Covid-19 pandemic and enactment of Republic Act 11469 or the “Bayanihan to Heal as One Act.”
Masongsong said extending the payment period was meant to provide assistance that would ultimately “redound to the benefit of poor Filipino consumers in far-flung areas.”
The NEA has been providing financial support to ECs through various loan windows for their capital expenditure projects and rehabilitation or upgrading of their distribution facilities.
These include regular, calamity and concessional loans, stand-by and short-term credit loans, single-digit system loss loan, renewable energy loan and modular generator sets loan.
Earlier, the agency allowed power co-ops to secure short-term loans from sources other than the agency, like banks, financing companies and other established financial intermediaries, as long as they are reasonable and appropriate.
Under the NEA Loan Policy 14-A, ECs may borrow money from financial institutions to augment monthly collection deficiencies that would cover their power bills; to facilitate working capital requirements; and to purchase maintenance vehicles.
Terms and conditions of the loans must also be “fair and equitable” or repayment period shall not exceed three years; interest rates are reasonable and at the lowest, if possible; and the amount of loan shall not exceed three times the EC’s average power billings.
