THE National Electrification Administration (NEA) has allowed electric cooperatives (ECs) to secure short-term loans from other financial institutions apart from those provided by the agency to mitigate the economic repercussions of coronavirus disease 2019 (COVID-19) on their commercial operations.
“We take cognizance of the ECs mandate to operate to ensure continued service delivery to the member-consumer-owners during the state of calamity. However, the financial condition of the ECs might be adversely affected due to the COVID-19 situation,” said NEA administrator Edgardo Masongsong.
ECs may secure short-term loans from other sources as long as they are reasonable and appropriate to augment monthly collection deficiencies that would cover their power bills; to facilitate working capital requirements, and for the purchase of maintenance vehicles.
The terms and conditions of the loans must also be fair and equitable with repayment period not exceeding three years. Interest rates should also be reasonable with a total amount not surpassing three times the EC’s average power billings.
Masongsong said the loans must not involve the “encumbrance of real properties or a substantial portion of other properties or assets.”
