The Department of Energy (DoE) is allocating P2 billion a year for rural electrification projects until 2017, as part of its thrust to extend electricity services to 90 percent of all households in the Philippines in six years, from the current 70-75 percent.
Energy Secretary Rene Almendras said that the government believes that the provision of electric services will yield “more opportunities for improved quality of life, greater access to basic services and better infrastructure for rural development.”
“Rural electrification, therefore, is greatly directed toward socio-economic growth of the marginalized sectors, the fisherfolk and farmers living in remote, far-flung, and un-electrified barangays (villages) of the country,” Almendras said.
Almendras added that the DoE is also allocating funds for the expansion of the electric cooperatives, but these co-ops first need to prove that “they are responsible.”
Almendras has been urging electric cooperatives to significantly improve their operations and become more financially viable in view of the changing landscape of the Philippine power industry.
Although electric cooperatives are mostly nonprofit groups, Almendras stressed the need to equip them with a “different perspective” so that they can be financially viable.
The DoE also wants to improve the credit-worthiness of electric co-ops, specifically seeking to establish a credit and governance risk rating system for electric cooperatives, to further encourage investments.
According to the DoE, it plans to use a portion of a grant from the World Bank’s Global Environment Facility to establish the credit and governance risk rating and scoring system, which will serve as a reference for private financial institutions.
The DoE said that this move will set assessment standards for electric cooperatives.