Announcement of Twelve Million US Dollars Power Loan in the Philippines on April 5, 1967

• 1818 H STREET. N.W., WASHINGTON Bank Press Release No. 67/16 D. C. 20433 TELEPHONE: Subject: EXECUTIVE 3-6360 $12 million power loan April 5, 1967 in the Philippines The World Bank has approved a loan equivalent to $12 million to the National Power Corporation in the Philippines. The loan will assist in financing a 75,000- kilowatt thermal power station to .supply additional power to the Manila area, im4 the addition of a 50,000-kilowatt unit at the Maria Cristina hydroelectric station which supplies power to an industrialized area in the northern region of the island of Mindanao. Nine financial institutions have agreed to participate in the loan for a total amount of $1,105,000 representing the first five maturities which fall due between December 1, 1970 and December 1, 1972. The participants will be Manufacturers Han- • over Trust Company, New York; Seattle-First National Bank; United States National Bank of Oregon, Portland; Bank of America National Trust and Savings Association, San Francisco; Union Bank, Los Angeles; Marine Midland Grace Trust Company of New York; National Bank of Connnerce of Seattle; Girard Trust Bank, Philadelphia; and The First Pennsylvania Banking and Trust Compa~r·,,-hiladelphia. This will be the: Bank·' s fourth loan to the National Power CC)rporation (NPC), a government-owned corporation responsible for the generation and supply of power throughout the Philippines. NPC's largest area of operation and the largest power market in the Philippines is on the island of Luzon where NPC operates a system of high-voltage transmission lines connecting the major generating plants in the north with consuming centers in the central part of Luzon. Power for the system, now totaling 811,000 kilowatts, is supplied both by NPC' s own plants anq. by plants of tl·. privately-owned Manila Electri~ Comp~ny (Meralco). Meralco holds the power franchis. • for the greater Manila area ar1fd is expanding its capacity. . Meralco' s expansion, which is being assisted by financing from the Bank's affiliate, the International Finance Corporation, together with facilities which NPC currently has under  - 2 - construction, will add 383,000 kilowatts to the Luzon grid by mid-1968. To this will be added 75,000 kilowatts from the new Bataan thermal plant. The thermal plant will be located on the Bataan Peninsula across the h~y from Manila, and will be laid out for future expansionff The site is near the Esso Bataan • Refinery from which high viscosity fuel will be piped dire~tly to the plant. About 29,000 kilowatts of the plant's output will be delivered directly to an Esso ferti- lizer plant nearby and the remainder will be fed into the Luzon grid. On the island of Mindanao, NPC operates the Agus grid which now receives power from the Maria Cristina hydroelectric plant. The market served by the Agus grid is largely industrial; important customers include companies producing chemicals, ce- ment, fertilizers and steel. Transmission lines are being extended to serve some nearby towns but growth in demand can be expected primarily from industrial develop- ment. The fourth unit of 50,000 kilowatts to be installed at Maria Cristina will increase the capacity of the station to 150,000 kilowatts. The project also includes the. construction of control works on the Agus River at the outfall of-Lake Lanao -- a large natural reservoir. Regulating the outfall of the lake, by the construction of permanent structures and the dredging of an approach channel at the lake outlet • to the Agus River, will enable 750,000 kilowatts to be developed in seven stages over the 22-mile course of the Agus River. The total cost of the thermal and hydroelectric projects now being undertaken is estimated at the equivalent of $22 million. The Bank loan will cover $12 million of the total and the remaining costs will be met by the National Power Corporation from earnings and local borrowings. The loan will be for a term of 20 years and bear interest at the rate of 6% per annum. Amortization will begin in December·l970. The loan will be guaranteed by the Republic of the Philippines. This will be the Bauk 1 s tenth loan in the Philippines. bringing the total to $146.7 million. This includes $68.1 million lent to the National Power Corporation; the other loans were for port improvemen.ts, agricultural development, water supply, education and private industry.