JBIC set to offer wind farm loan to PNOC-EDC

12 June 2007 – The Japan Bank for International Cooperation (JBIC) has said it is willing to extend a loan to the Philippine National Oil Company – Energy Development Corporation (PNOC EDC) to fund a wind power project in the Ilocos Norte province, according to the National Economic and Development Authority (NEDA).

The PNOC-EDC proposal to seek JBIC funding came after the 30 MW Northern Luzon wind power project Phase 1, which had been scheduled for implementation in March 2002, has been plagued by problems such as failure of contract bidding and an increase in project costs.

“Per PNOC-EDC, JBIC [is] willing to give a 2-year extension, but has not formalized this yet,” the NEDA said. The outstanding PNOC EDC loan will expire in October of this year.

The cost of the project rose to P3.5bn ($75m) from P2.9bn when it was approved in 2002.
Of the total cost, P2.7bn would be financed by JBIC, while P547m and P310m would come from PNOC-EDC and the Development Bank of the Philippines, respectively.

The project will help to meet the country’s demand after 2009 when electricity use is forecast to exceed supply. It includes a 115 kV single-circuit transmission line in Saoit, Burgus, Ilocos Norte. The plant will generate 120 GWh per year and is expected to contribute an annual $60-$100 million in revenues to the national economy. It will also lead to at least $6 million in savings on crude oil importation a year and a lower electric cost of $0.05 a kWh for consumers.

However, the NEDA recently deferred approval for the project after President Arroyo requested that the project be transferred to Mindanao, the second largest and easternmost island of the Philippines.