MANILA, Philippines -- The government is seeking for an additional $40-million funding from the World Bank to further expand its Rural Power Project, particularly in Mindanao.

According to a project paper, the additional loan will enable the Development Bank of the Philippines?the implementing agency?to expand the public-private partnership in providing 10,000 new rural customers access to energy access.

?Access to electricity is expected to substantially improve the quality of life of beneficiaries and promote economic development in the areas,? World Bank said.

According to World Bank, the additional financing project builds up on the success of the first adaptable program loan (APL1), which had an original $10-million financing.

Demand for funds under APL1 has been high as manifested by loan applications which have been soaring since 2007. DBP reported that by-end September 2008, loan disbursements stood at 92 percent of available funds, hence the need for additional funds.

The proposed additional financing of $40 million is expected to scale up priority investments on two broad subsectors?small-scale power generation (for new and renewable energy) and electric cooperatives (ECs).

Priority projects would include those concerning EC grid subcomponents, which aim to turn ECs into competitive, efficient and financially viable organizations.

On the supply side, World Bank explained that 119 electric cooperatives would be responsible for power distribution in the rural areas. Most ECs lack access to commercial lending and are prone to suffer from high levels of electricity losses, it added.

Another priority area concerns generation, particularly decentralized electrification subcomponents, including small-scale energy generation, mini-grids and stand alone renewable energy technologies.

According to World Bank, almost half of the country?s generating capacity depends on imported fuels and thus is subject to price volatility.

?The development of indigenous and renewable energy would help cushion the effects of unpredictable oil price increases,? it explained.

World Bank said the additional financing project would tackle supply and demand related issues, that is, making ECs and private generators in rural areas less vulnerable to fuel price volatility and improve their energy and operational efficiency.