DOE backs P400-M debt deal for Tawi-Tawi

The Department of Energy (DOE) welcomed a newly signed debt restructuring agreement between power provider Kaltimex Rural Energy Corp. and Tawi-Tawi Electric Cooperative Inc. (Tawelco).

The DOE said this would help stabilize the cooperative’s finances and improve supply reliability in the country’s southernmost province.

In a statement, the DOE said the agreement addresses roughly P400 million in outstanding obligations incurred by Tawelco. It is also expected to ease longstanding operational and financial pressures that have weighed on power supply in the town of Bongao and nearby areas.

“This agreement reflects a shared commitment to restore financial stability and improve day-to-day operations, so communities can benefit from more dependable electricity services,” Energy Undersecretary Rowena Cristina Guevara said.

“When obligations are put on a workable path and performance is consistently monitored, the gains can translate into better service for households, stronger support for local enterprise, and a more enabling environment for development,” Guevara said.

Kaltimex and Tawelco have been partners since 2018 under a DOE-endorsed and Energy Regulatory Commission-approved power supply agreement. Pursuant to this, Kaltimex built a diesel-fired power plant to meet persistent electricity demand in the province.

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However, the cooperative later faced mounting challenges that led to the accumulation of arrears. This prompted the intervention by the National Electrification Administration and a subsequent leadership reorganization.

A new management team was installed in June 2022.