The Asian Development Bank is working with the Philippines to restructure the power sector. The project is improving the investment climate in the power sector to improve both power generation and transmission.
|Project Name||Power Sector Development Program Loan|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Energy - Energy sector development and institutional reform
|Gender Equity and Mainstreaming||No gender elements|
The primary objective of the program loan is to restore financial viability of the power sector and specifically support the Government's committed action to absorb NPC's long-term liabilities.
The specific objective of Subprogram 1 of the PSDP is to support the absorption of NPC's stranded debt and cost by the Government and create necessary conditions for the successful implementation of the privatization program in Subprogram 2.
|Project Rationale and Linkage to Country/Regional Strategy||
The financial crisis faced by Philippines power sector has aggravated and complicated the country's macro-economic situation. Despite tax reform measures implemented by the Government, the National Power Corporation's (NPC's) requirement for Government provision of guarantees on its debt obligations and its liabilities with respect to contracts with independent power producers (IPPs) remain a serious financial drain on the Government's fiscal resources. Ensuring financial recovery of the power sector is a key to the Government's efforts at reversing fiscal imbalances and improving its fiscal consolidation.
The proposed Power Sector Development Program (PSDP) has been designed to ensure the implementation of mitigating policy measures which will lead to gradual but steady restoration of the power sector's financial viability with further parallel improvements in the regulatory framework, the competitive market for power, and opportunities for private sector participation. The PSDP will support the Government's assumption of P200 billion of NPC's debt. Timely implementation of the PSDP in tandem with the implementation of tax reforms will strengthen the Government's financial management and assist in achieving fiscal consolidation.
The power sector reform and restructuring has reached a critical juncture. While it has been widely recognized that the financial crisis of the power sector is the serious result of substantive delays in the sector policy reform and restructuring implementation, some vested interests opposing the ongoing sector reform and restructuring cite it as a principal cause of the current sector financial crisis and suggest returning to the previous vertically integrated government _owned monopoly. Therefore, timely undertaking of aggressive steps to continue the efforts to complete the sector policy reform and restructuring has become even more critical and fundamentally important that both the Government and ADB should reiterate the confidence in achieving the policy objectives of such initiatives and envisaged development impacts and results.
|Description of Outcome|
|Progress Toward Outcome|
|Description of Project Outputs|
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Geographical Location||Whole country|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||No consulting services required.|
|Procurement||No contracts for civil works/goods to be awarded.|
|Responsible ADB Officer||Zhai, Yongping|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Energy Division, SERD|
Department of Finance
Makati, Metro Manila, Philippines
|Concept Clearance||17 Jun 2005|
|Fact Finding||19 Apr 2004 to 06 May 2005|
|MRM||07 Sep 2005|
|Approval||08 Dec 2006|
|Last Review Mission||-|
|PDS Creation Date||01 Mar 2006|
|Last PDS Update||06 Feb 2009|
|Approval||Signing Date||Effectivity Date||Closing|
|08 Dec 2006||11 Dec 2006||19 Dec 2006||30 Jun 2009||-||30 Jun 2009|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||750.00||Cumulative Contract Awards|
|ADB||450.00||08 Dec 2006||450.00||0.00||100%|
|Cofinancing||300.00||08 Dec 2006||450.00||0.00||100%|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Amendment to the Loan Agreement for Subprogram I - Power Sector Development Program Cluster between Republic of the Philippines and Asian Development Bank (1 July 2007)||Loan Agreement (Ordinary Resources)||Jul 2007|
|Amendment to the Loan Agreement for Subprogram I - Power Sector Development Program Cluster between Republic of the Philippines and ADB (5 March 2007)||Loan Agreement (Ordinary Resources)||Mar 2007|
|Loan Agreement for Subprogram I - Power Sector Development Program Cluster between Republic of the Philippines and ADB between Republic of the Philippines and ADB dated 11 December 2006||Loan Agreement (Ordinary Resources)||Nov 2006|
|Power Sector Development Program||Reports and Recommendations of the President||Nov 2006|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.