WASHINGTON, D.C., Aug. 26 -- The International Finance Corporation (IFC) has approved a US$35.5 million financing package to Northern Mindanao Power Corporation (NMPC) to develop two diesel-fired power plants near Iligan City on Mindanao island in the Philippines. IFC will provide $4.5 million in equity and lend US$12.5 million for its own account. The remaining US$18.5 million in loan financing will be syndicated with foreign and Philippine financial institutions. With an estimated total cost of US$106 million, the plants are expected to generate approximately 108 megawatts of electricity. Mindanao, one of the three main Philippine islands, suffers critical energy shortages because of prolonged droughts that have reduced the island's electricity generating capacity, which relies heavily on hydro power. Tomen Corporation of Japan and the Alcantara Group of the Philippines are developing the project on a build-operate-transfer (BOT) basis. One plant is expected to start operation in July and the other in Decem
ber. The short construction period with diesel-fired plants was a key reason this technology was chosen. Initially, the plants will be operated and maintained by Wartsila Diesel Oy of Finland, which is supplying the diesel engines. Ownership of one of the plants will transfer to the Philippine National Power Corporation after 10 years; the other, after 12 years. IFC is a member of the World Bank Group and is the largest multilateral institution providing equity and loan financing for private sector projects in developing countries.
