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Friday, October 24, 2008

NEDA Board Approves Land Bank Credit Line for Energy Efficiency

National Economic and Development Authority Board recently approved the Credit Line for Energy Efficiency and Climate Protection in the Philippines with the Land Bank of the Philippines as proponent.

NEDA also approved the Asian Development Bank – Development Policy Support Program, Subprogram 2 and the change in scope and increase in cost of the Metro Iligan Regional Infrastructure Development Project.

The CLEECP has been approved with a total cost of about PhP1.72 billion. It is nationwide in scope and will support initiatives, programs and projects in the area of energy efficiency and climate protection. Specifically, it aims to lower annual carbon dioxide emissions equivalent to 24 million tons by using alternative sources of energy.

A least 50 percent of the total project cost will be made available for Visayas and Mindanao. The loan proceeds from the KfW amounts to about PhP1.38 million and the LBP equity amounts to PhP344.3 million. The credit line will be implemented from 2009 to 2012.

Socioeconomic Planning Secretary and NEDA Director General Ralph G. Recto, who also sits as Vice Chairperson of the Board, said that the CLEECP will be available to private sector companies and entities which are at least 70 percent Filipino-owned as well as to local government units, national government agencies, and government-owned and controlled corporations.

“This credit line can be availed even by small to medium companies because it has no limitation in terms of asset size,” he added.

Among the potential clients listed in the Land Bank pipeline are the Cotabato Sugar Central Corp., Davao Sugar Central Corp., Philcan Industrial Corp., the Provincial Government of Ifugao, and the Municipal Government of Dinapigue, Isabela.

“The Government of Ifugao and the municipality of Dinapigue in Isabela, for instance, produce power from renewable energy sources. The sugar factories, on the other hand, uses bagasse ─ the biomass remaining after sugarcane stalks are crushed to extract their juice ─ as an alternative fuel source for sugar mills. This kind of fuel minimizes the emission of greenhouse gases and reduces consumption of power. These are the reasons why they are very much eligible to avail the credit line,” Recto said adding that the main impact of the project would be in terms of energy savings, energy efficiency and reduction in the greenhouse gas emissions.

Meanwhile, the NEDA Board also approved the DPSP 2 program in which the Bank will provide a loan amounting to US$250 million. The program, which is second of a cluster of three subprograms, focuses more on supporting fiscal policy sustainability and strengthening governance in public expenditure management and procurement. It is a continuation of the first subprogram which focused on the core areas of fiscal consolidation and was signed and disbursed in February 2007. The Monetary Board approved the program last October 9.

The change in scope and cost increase of MIRIDP also got the nod of the NEDA Board. The road segment 2 or the 9.198-kilometer Baloi-Pantao-Ragat Road of the project has been realigned to the 12.8-kilometer Baloi-Matungao-Linamon Road.

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