Guarantee CoverUp to 80% of principal  loan amount plus 3 months interest
Guarantee FeeMinimum of 0.25% p.a. on guaranteed amount (to be determined)
subject for evaluation on the risks associated with the credit
Processing FeeProcessing/front-end fee of 1.50% plus applicable taxes based
on guaranteed principal amount to be paid by the Borrower to PHILGUARANTEE

Minimum Eligibility Criteria

Eligible Borrower/sa. Electric Cooperatives
– Duly registered with the NEA or CDA
– Classified as Green or Yellow by NEA
– Has NEA clearance/approval to obtain financing
– Has a projected debt service coverage based on forecasted cash flow of at least 1.0x

b. Non-ECs – Private firms with viable “Investment Management Contracts) (IMCs) with ECs (should meet the following prescribed IMC provisions)
– Under the IMC scheme, the investors will assume full management and profit and loss responsibility for EC operations, accountable to the EC Board, over the long-term contract term experience to be 10-15 years).
– The IMC investor will be responsible for mobilizing financing for capital investment from its own equity, from debt with the IMC investor as borrower, and from internally generated EC revenues.
– The IMC would, by design, provide incentives for efficiency through performance-based remuneration, enhance the accountability of service providers and mobilize private finance.

Loan Purpose

– Power distribution upgrades of ECs which shall result in direct measurable energy (kWh) savings
– Improving power supply system safety, reliability, efficiency and power service quality for existing customers
– Rehabilitation and capacity upgrades of the existing supply system (including purchase of second-hand sub-transmission facility)
– Providing the necessary hardware, software, motor vehicles, tools and equipment to improve employee productivity, safety and efficiency of customer service provision

Guarantee Terms and Conditions

Guarantee TermTerm of the guarantee will coincide with that of the debt which is currently estimated at 3-7 years with provision for grace period. Maximum guarantee term shall be nine (9) years.
Has a projected debt service coverage based on forecasted cash flow of at least 1.0x.
Single Borrower
The guarantee liability per borrower shall not exceed P300 million or 25% of the aggregate maximum allowable guarantee portfolio, whichever is lower.
Collateral/SecurityProject cash flows and/or assignment of the Reinvestment Allowance Fund or RAF (represents 5% of the borrower’s monthly gross revenues, to be placed in escrow account) without prejudice to the submission of additional real estate properties and/or acceptable chattels and other collateral to include:
– Assignment of receivables with recourse
– Assignment of power purchase agreement
– Collateral sharing with NEA in case of NEA-PHILGUARANTEE co-financing