2018News

ADB okays $484.3 million in loans, grants for PHL

By Cai Ordinario, September 17 2018; Business Mirror

https://businessmirror.com.ph/adb-okays-484-3-million-in-loans-grants-for-phl/

Image Credit to ADB

The Asian Development Bank (ADB) said it has approved a total of $484.3 million in loans and grants for the Philippines as of August this year.

Data provided in the ADB web site showed that the amount covered four Philippine-specific projects, the largest of which is the Expanding Private Participation in Infrastructure Program, Subprogram 2 approved on August 17.

The project will be financed by a $300-million loan from the ADB’s Ordinary Capital Resources and a $179-million loan from the L’Agence Francaise de Développement, or French Development Agency.

“Subprogram 2 now focuses on consolidating PPP [public-private partnership] reforms to stimulate and facilitate the development of the Philippines’s PPP market and to ensure the earlier reforms are successfully implemented,” the ADB said.

The project, which is not yet considered “active” by the ADB, aims to strengthen government financial support to PPPs; expand and efficiently implement the pipeline of PPP projects; and strengthen the legal and regulatory frameworks for PPPs.

The ADB also approved technical assistance financing worth $2 million each for the Railway Project Implementation Support and Institutional Strengthening and the Philippine National Oil Co. (PNOC) Batangas Liquefied Natural Gas Project.

The $2-million technical assistance financing for the Railway Project Implementation Support and Institutional Strengthening project will be obtained from the Japan Fund for Poverty Reduction, which is administered by the ADB.

The project is not yet considered active or ongoing by ADB since it was only approved on August 22.

“The project will support the construction of the 51-kilometer [km] section of a new railway line connecting Metro Manila and the regional center in Clark and the Clark International Airport, located in the Central Luzon region, around 100 kms north of Manila,” the ADB said.

The $2-million technical assistance for the PNOC Batangas, Liquefied Natural Gas Project will come from the ADB’s Technical Assistance Special Fund (TASF).

The project, which intends to develop a liquefied natural gas (LNG) hub (the Project) at San Pascual, Batangas, to increase the energy security of the country, was approved on May 11 and is considered “active” or ongoing by the ADB.

The ADB said the project will act as a hub and will have the ability to receive imported LNG, to break larger LNG cargoes into smaller cargoes for supply to neighboring islands, regasify LNG and generate electricity from the regasified LNG.

It added that all domestic gas currently comes from the Malampaya gas field in Palawan. The Malampaya gas field, which is the sole supplier of gas for 2,700 megawatts of gas-fired power in Luzon, is set to deplete creating uncertainty in the market.

“The project will help secure long-term gas supply for the power plants, enhancing the energy security of the country. It is also expected to stimulate incremental demand for natural gas in Luzon and the surrounding islands,” the ADB said.

The smallest financing received by the Philippines from the ADB was the $1.3 million allocated for the Integrated Flood Risk Management Sector Project.

The cost is composed of a technical assistance of $1 million from the TASF and $300,000 from the Cooperation Fund for Project Preparation in the Greater Mekong Subregion and in Other Specific Asian Countries.

The project, which was approved on June 21, is now considered “active” or ongoing by the ADB.

It aims to assist the government reduce flood risks in six river basins—Apayao-Abulog and Abra in Luzon, Jalaur in Visayas, and Agus, Buayan-Malungon, and Tagum-Libuganon in Mindanao.

“The transaction technical assistance [TRTA] will help the government to prepare the ensuing project, as well as develop a preliminary road map and a long-term investment program for flood risk management [FRM]. The TRTA will directly complement the technical assistance loan for IPIF [Infrastructure Preparation and Innovation Facility],” the ADB said.

In October last year, the ADB extended a $100-million loan to help the Philippine government finance its project preparation requirements for the “Build, Build, Build” infrastructure program.

The ADB said the loan will be used for the IPIF which will finance project feasibility studies, procurement of consultants, detailed engineering and preparing bid documents, among others.

The total cost of the facility is $164.06 million, with the Philippine government contributing $64.06 million. The project is expected to be completed in the second quarter of 2021.

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