State-run National Transmission Corp. said Monday it is in “serious talks” with the World Bank to finance the P52-billion Visayas-Mindanao interconnection project.
TransCo president Melvin Matibag said the World Bank was looking at providing a 30-year zero interest loan for the facility and submitted the proposal to the Energy Department for review and endorsement.
The project involves the interconnection of Visayas and Mindanao via Cebu and Zamboanga. The project is estimated to be completed in 46 months with an estimated cost of P51.697 billion.
“We have to tie this up with renewable energy development… because this is an RE fund that will be given to us,” Matibag said. Mindanao hosts one of the largest hydro projects in the country, the Agus-Pulangi hydro plants.
Matibag, one of the guests in the two-day Executive Seminar on Fostering Dynamic Competition in the Philippine Power Industry, said the Finance Department was informed of the World Bank’s proposal.
“DoF because they are the ones handling expenditures to do that,” Matibag said.
Matibag said the World Bank officials were “very excited” over the funding, which was poised to become one of the biggest projects of the multilateral lending institution in the Philippines for some time.
“Whatever is the cost of the project [they will fund]. It can complement [other funding] or can be stand alone,” he said.
Matibag said the government did not want to pass on the cost of building the facility to consumers, which would translate into higher power rates.
Matibag said government was open to both TransCo and National Grid Corp. of the Philippines in constructing the facility as long as the cost of the project would not be passed on to consumers.
TransCo owns the country’s transmission assets while NGCP operates and maintains it under a concession agreement with the government.
Matibag said NGCP could construct the project as long as TransCo would be the supervising authority.
TransCo has a pending manifestation with the Energy Regulatory Commission on the interconnection project, stating its position of financing the project to avoid passing on the additional cost to consumers.
ERC earlier granted provisional authority to NGCP to implement the project.
TransCo also asked ERC to appoint the Commission on Audit as observer in the bidding, award and implementation of the project to ensure transparency and compliance with the least cost mandate in procurement.
Matibag said TransCo was also seeking a comparative survey of the transmission line specially the use of high voltage direct current line versus alternating current line.
“There is a P15-billion cost in the conversion…Also, I’m asking for the comparison of the eastern and western side,” he said earlier.
Matibag said that in the event that ERC rejected the proposal, TransCo would have the option to bid out the project.
“I will enter into a JV with a private company with a technical capacity and we will bid, we will participate,” he said.