Kaltimex Rural Energy Corp. and the Tawi-Tawi Electric Cooperative Inc. have signed a debt restructuring agreement to address about P400 million in arrears to stabilize the cooperative’s finances and improve electricity service in Bongao.
Department of Energy Undersecretary Rowena Cristina Guevara witnessed the signing on Dec. 15, 2025, noting that the deal reflects a shared commitment to restore financial stability and improve day-to-day operations in geographically isolated areas.
The agreement follows a 2018 power supply deal where Kaltimex built a diesel plant to meet local demand, although the cooperative later struggled with operational and financial challenges.
Under the new terms, the cooperative will provide a P10-million upfront payment and follow a structured amortization schedule. The deal includes a three-month cure period for missed payments and requires the cooperative to meet specific efficiency targets, such as reducing system losses and achieving 100 percent billing and 95 percent collection efficiency.
To support expansion without new borrowing, Kaltimex will provide a 5-kilometer dedicated feeder line to connect new customers near municipal and provincial offices. Revenue from these new connections will be used to fund the repayment plan.
National Electrification Administration officials previously reorganized the cooperative’s leadership in 2019, eventually appointing Tawi-Tawi Electric Cooperative Inc. management team head Peraida Jalani in June 2022.
Because the cooperative’s credit standing prevented bank refinancing, the partners opted for the restructuring approach based on recent improvements in payment performance.
The Department of Energy also endorsed a request to the Energy Regulatory Commission to increase the cooperative’s allowable capacity band by 10 percent. This will strengthen emergency reserves and reduce reliance on short-term generator leasing, lowering the risk of outages during peak demand.
To ensure long-term compliance, the cooperative will undergo monthly performance reviews to validate targets, including keeping system loss below 10 percent and completing infrastructure projects.
The cooperative serves more than 11,000 captive customers, including 10,225 residential and 557 commercial connections.
Department of Energy officials said the arrangement, anchored on transparent performance targets, could serve as a template for other electric cooperatives facing similar financial constraints in underserved areas nationwide.
