The multilateral lending institution announced yesterday its board of directors has approved a $44-million guarantee for the Philippines Renewable Energy Project implemented by the Local Government Unit Guarantee Corp.
LGU Guarantee Corp. is a credit guarantee company owned by the Bankers Association of the Philippines and the Development Bank of the Philippines.
The guarantee provided by World Bank to LGU Guarantee Corp. would help reduce risks of commercial lending to electric cooperatives.
“This guarantee will enable these cooperatives to expand their electricity network, invest in renewable energy like small hydroelectric and solar power plants and expand electricity access for poor households,” said the Washington-based bank in a statement.
PhREP would provide more financial resources to an existing financial guarantee program of the government—the Electric Cooperative Partial Credit Guarantee Program—that has been providing credit guarantees since 2004 to commercial banks in the Philippines that extend loans to electric cooperatives.
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The World Bank has also approved a $23-million grant for the Access to Sustainable Energy Project (ASEP) also implemented by the LGU Guarantee Corp. The grant is designed to help bring solar power to remote communities and islands not connected to the electricity grid managed by electric cooperatives.
World Bank country director for the Philippines Mara Warwick said the two projects could invigorate the country’s energy sector and strengthen the economy.
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