Napocor gets leeway to borrow funds | Inquirer Business
DOJ opinion clears authority to contract loans

Napocor gets leeway to borrow funds

/ 02:07 AM September 27, 2022
Napocor gets leeway to borrow funds


National Power Corp. (Napocor) now has wider access to funding, enabling the state-run corporation to provide electricity to more remote areas nationwide, according to the Department of Energy (DOE).

Citing the Sept. 23 opinion of the Department of Justice (DOJ), the DOE said the state-led firm holds legal authority to borrow funds or contract loans to fulfill its missionary electrification function.


Energy Secretary Raphael Lotilla said the DOJ’s favorable opinion would allow Napocor “to establish a credit line with local banks that would enable it to manage the fuel price increase that has significantly affected the NPC’s financial position.”

Under Section 70 of the Electric Power Industry Reform Act (Epira), Napocor is mandated to energize off-grid areas through the Small Power Utilities Group. It is also responsible for generating power and providing associated power delivery systems in areas which are not connected to the transmission system.


This undertaking is funded by the Universal Charge for Missionary Electrification (UCME), which is then collected by power distributors from all electricity end-users, depending on the rate approved by the Energy Regulatory Commission.

In the case of Manila Electric Co., universal charges as of September stood at P0.2228 per kilowatt hour from P0.1989 per kWh previously. This included the additional P0.0239 per kWh to the UCME as recently ordered by the regulatory agency.

“The funds of NPC sourced from the UCME is not sufficient to support NPC’s current operation,” Lotilla said in a statement.

“This underlines the efforts of NPC’s board and management to ensure timely payments to NPC’s new power providers,” he added.

Further, the clearance from the DOJ is seen to enable Napocor to ramp up renewable energy source buildup in areas not connected to the main grid and improve island-wide transmission in major off-grid islands, particularly through public-private partnerships.

Lotilla assured that the “necessary controls are now in place” under the Epira law “for the judicious use of the power to contract loans.”Napocor is currently supplying power to 229 missionary areas across the country, most of which are yet to gain round-the-clock access to energy. INQ

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TAGS: credit line, electrification, National Power Corp.
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