MANILA, Philippines—United Coconut Planters Bank is lending P326 million to Davao Del Norte Electric Cooperative (Daneco) to help the power distributor upgrade its facilities and cope with the growing demand for electricity in its service areas.
In a press statement on Thursday, the bank said Daneco would use the term loan to double the capacity of two of its 10 substations from 10MVA to 20MVA as well as rehabilitate its power lines, transformers and other distribution facilities and equipment. The upgrade will benefit the 125,900 households, commercial and industrial establishments, government offices and public utilities that get their electricity from Daneco, the bank added.
Daneco is one of the biggest electric cooperatives in the country. It distributes electricity to 374 barangays (villages) in Davao del Norte, Tagum City, the Island Garden City of Samal and Compostella Valley. Power usage in these areas has been growing at an average of 8 percent a year on account of the rise in business activities and the increase in the number of households, UPCB reported.
In particular, the Island Garden City of Samal—with its many fine white-sand beaches, Dugong sanctuary and numerous other natural attractions—has been experiencing a surge in investments in tourism-related infrastructure and in residential property developments.
Davao del Norte and Compostella Valley are the Philippines’ leading producers of banana, a major export crop that generated $250 million in foreign exchange earnings for the country last year. The former is also one of Mindanao’s rice granaries.
The UCPB loan is guaranteed by the LGU Guarantee Corp. (LGUGC) under its regular guarantee program and the Electric Cooperative-Partial Credit Guarantee program (EC-PCG).
LGUGC is a private company established by the Bankers Association of the Philippines, the Development Bank of the Philippines and the Asian Development Bank to provide guarantee cover for loans to local development projects. It administers the EC-PCG, a special guarantee program put up by the World Bank with a $10-million grant to the national government to encourage commercial banks to support rural electrification by financing the expansion and rehabilitation of the distribution facilities of electric cooperatives.
Daneco is the third power cooperative in Mindanao to receive financing from UCPB. The two others are Surigao del Norte Electric Cooperative and Cotabato Electric Cooperative, which received loans amounting to P85 million and P25 million, respectively, to expand and upgrade their distribution facilities.