Philippines

Philippines: World Bank approves Us$12.94 million loan to help stabilize power supply in typhoon-prone Bicol

Format
News and Press Release
Source
Posted
Originally published
Press Release No:2008/209/EAP

WASHINGTON, February 7, 2008 - The World Bank Board of Executive Directors approved today a US$12.94 million loan to the Philippine government to help the National Transmission Corporation (Transco) stabilize the power supply in the Bicol region in southern Philippines by replacing electricity transmission infrastructure damaged by typhoons in 2006.

The World Bank offered the Government an emergency support operation to respond to the pressing need to rebuild the Bicol region immediately after Typhoon Reming devastated the area in November 2006, killing over 700 people, toppling power lines and burying villages in mud. The emergency support would finance most of the electricity transmission infrastructure that Transco needed to build in the region since Typhoon Reming. Construction started shortly after the typhoon and is expected to be completed by the first quarter of 2008. The project will also improve Transco's capability to build stronger infrastructure that will make the power supply in Bicol and the nearby areas less vulnerable to strong typhoons.

Energy Secretary Angelo Reyes said: "With its timely emergency funding, the World Bank is helping us restore stability to our power supply which will benefit not only the residents of the Bicol Region who were affected directly by super typhoon Reming, but also those who are receiving electricity from the inter-connected Luzon Grid. The new towers will be stronger and will be able to protect the affected and nearby communities better. Supply of electricity will also be more reliable."

Bert Hofman, World Bank Philippines Country Director, said: "The project reflects the World Bank's ability to quickly respond to natural and man-made disasters. It supports the need to ensure secure power supply to all parts of the country, especially the most vulnerable areas such as the Bicol region - home to 5 million people. The assistance to Bicol is important not only because the region is in the direct path of annual storms, but it is also one of the poorest areas in the Philippines. Ensuring a more reliable power supply in Bicol will therefore significantly contribute to poverty reduction in the Philippines."

The loan will be used to fund the ongoing replacement of 118 transmission towers in Bicol. It is part of a larger $21.6 million program jointly financed by the Government and the World Bank to provide Transco with 11 additional Emergency Restoration Structures, establish an investment program that will strengthen the power system against future typhoon damage, and remove infrastructure constraints to the region's economic development.

The economic cost of damage from two super typhoons (Reming and Milenyo) that hit the country in 2006 is estimated at over $250 million, excluding revenue losses to Transco and the electricity cooperatives. This is more than 10 times the cost of restoring the system and strengthening investments that the proposed project supports.

Mr. Hofman added: "The power system's capability to withstand severe weather and Transco's ability to respond to power system emergencies is essential to minimizing future losses."

Contacts

In Manila:
Leonora Aquino-Gonzales (632) 917-3003
E-mail: lgonzales@worldbank.org
Anissa Tria (632) 917-3013
E-mail: atria2@worldbank.org

In Washington:
Mohamad Al-Arief (202) 458-5964
E-mail: malarief@worldbank.org

To know more about World Bank-assisted projects and programs in the Philippines, visit http://www.worldbank.org.ph