In Manila:
Karina Jacinto
Telephone: +632 848 7333
Email: kjacinto@ifc.org

In Hong Kong:
Desmond Dodd
Telephone: +852 2509 8183
Email: ddodd@ifc.org


Manila, May 27, 2004—The International Finance Corporation, the private sector arm of the World Bank Group, has received an advisory mandate from the Department of Energy in the Philippines to promote private investment and competitive infrastructure in rural power supply. IFC’s advisory activities will support development of a rural electrification plan that provides tangible social and economic benefits through private investment. As part of this mandate, IFC will address the sustainability of tariffs and the regulatory framework in addition to the financial viability of the transaction.

"Support for the advisory mandate has been provided by grants from Government of Norway and from IFC, through IFC's Technical Assistance Trust Funds program. Government of Japan has supported earlier work in the rural power sector on cooperative financing options for rural electric utililities."

“IFC is committed to assisting the Philippine government reinvigorate private participation in infrastructure,” said IFC Philippines Country Manager Vipul Bhagat. “IFC can help assure that the structure for attracting investment benefits from our global experience in infrastructure projects and commitment to achieving the highest standards and benefits for local communities.”

Presently, most rural areas are served by electricity cooperatives that lack access to the national electricity grid. The Small Power Utilities Group of the National Power Corporation, know as Napacor, supplies power to about 86 isolated grids in 31 provinces through small power stations. They require approximately 4.5 billion pesos ($80 million) annual subsidy for continued operation and investments.  Another 1.0 billion pesos per year would be required to reach new remote areas under an existing plan.
IFC will work with the DOE’s Power Sector Assets and Liability Management Corporation, or PSALM, and Napocor to develop a financially viable plan to introduce private sector participation through the sale of existing rural power assets.  IFC will attract private investors in order to increase efficiency, provide reliable supply and contribute capital for further investments.  

“IFC plans to closely coordinate its work with the World Bank, which has been actively supporting the Philippine government with policy and regulatory advice in the rural electrification sector,” said IFC’s Global Advisory Services Director Bernard Sheahan, “The project must be structured so that private investors are encouraged to invest. With our increasing knowledge on how to use private investment most effectively, IFC’s participation also can contribute to the efficient and economic delivery of public goods for the people of the Philippines.” IFC has worked with governments to structure and implement more than 100 privatization projects over the last two decades.  

In its fiscal year that ended in June 2003, IFC Manila committed five projects for a total of $ 66 million in the Infrastructure, Financial Markets, Health and Education and Information Technology Sectors. In FY04, IFC expects to undertake up to six projects for a total of $100 million. A large part of this is expected to be in the infrastructure sector.

The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.