infrastructure - bangsamoro development...

C H A P T E R 8Infrastructure

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8Infrastructure

Bangsamoro Development Plan

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Infrastructure72 is indispensable to promoting sustained

growth and development and encouraging social

cohesion. It facilitates travel and trade by reducing

transaction costs and creating markets. It facilitates the

mobility of people in search of better lives and economic

reward, and it provides better access to social services.

However, chronic insecurity—combined with rent-

seeking by local officials, local political clans, and private

armed groups—has driven up the costs of infrastructure

development and deterred contractors who fear for

their lives and safety. As a result, despite substantial

capital investment from the Central Government, the

Bangsamoro suffers from a significant infrastructure

deficit.

A. Context: A Fragmented and Overstretched Infrastructure Network

A.1. Road Network

Good infrastructure enables cheaper and faster movement

of people and goods and services. It enables farmers,

fishers, and other producers to get their products to the

markets efficiently, thereby maximizing their returns. It

increases labor mobility and, by reducing the financial

and opportunity costs of travel, improves opportunities

for viable tourism.

Connective infrastructure will be crucial for the

Bangsamoro to benefit from a spillover of growth from

production centers in Mindanao and elsewhere in the

Philippines where agglomeration has spawned rapid

growth. At present, many existing national, provincial,

municipal, and barangay roads in the ARMM are

dilapidated. The ARMM and the surrounding conflict-

Infrastructure8Figure 15: National Road Density (2012)

Note: Bangsamoro figures do not include data from six municipalities in Lanao del Norte and 39 barangays in North Cotabato due to difficulty of data attribution.Source: BDP-CPT estimate and JICA-Philkoei International, Inc. (using DPWH, DPWH-ARMM data)

Figure 16: Ratio of Paved National Roads (2012)


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affected provinces have a road density of only 0.028

kilometer of road per square kilometer of land area (see

Figure 15). This is the worst road penetration rate in the

country.

The ratio of paved national roads in the ARMM is better

than in the rest of Mindanao and the rest of the Philippines

(see Figure 16). However, the percentage of paved farm-to-

market roads (FMRs) in the ARMM is very low (see Figure

17). As a result of poor connection of tertiary roads to the

main highway, farmers face great difficulties and price

disadvantages in bringing their goods to processing and

marketing centers.73

The dilapidated condition of roads in the ARMM, low

pavement ratio, slow road network development, and poor

road design indicate institutional and capacity deficiencies.

The factors for these include poor maintenance procedures,

inadequate provision of maintenance funds, and poor

project implementation by agencies such as DPWH,

DPWH-ARMM, and engineering offices of LGUs. These

could be traced to neglect by past administrations, which

led to low productivity and limited income opportunities

for rural communities.

In the short term, priority will need to be given to,

addressing the main bottlenecks of connectivity, including

the poor condition of FMRs and the incomplete and

unpaved national roads and main arterial roads. Ongoing

projects included in the General Appropriations Act (GAA)

could be completed during the transition period.

A.2. Irrigation

Irrigation, which allows several harvests per season, is vital

to increasing farmer productivity, particularly in the rice

subsector. The ARMM has the lowest irrigated area relative

to potentially irrigable land, at only 25.8% (see Figure 18).

It should be noted, however, that irrigation requirements

differ among crops. Rice requires a relatively abundant

supply of water, while corn, cassava, coconut, and banana,

which are the main crops in the Bangsamoro, require less

water. Different irrigation systems and facilities need to be

developed according to the requirements of the locality

and the type of crops. The needs of a growing population

for potable water and the needs of farms for water to

increase their productivity will need to be balanced.

Construction of irrigation facilities will also have to

consider adaptability to climate change.

The priority needs for the irrigation subsector in BCT

include: (a) development and construction of national

and communal irrigation systems and (b) development of

LGU capacities to assist in maintaining irrigation canals

and communal irrigation systems.

A.3. Airports and Seaports

Three principal airports (Awang, Sanga-Sanga, and Jolo)

and three community airports (Malabang, Cagayan

Source: JICA-Philkoei International, Inc. (using DAR-ARMM and the World Bank’s 2005 Joint Needs Assessment of Conflict Areas in Mindanao report)

Figure 17: Ratio of Paved Farm-to-Market Roads in ARMM (2005)

Figure 18: Ratio of Irrigated to Estimated Irrigable Area (2000–2012)

Source: DA-BAS


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de Sulu, and Wao) serve the BCT (see Map 6). The

Bangsamoro has no international airport. The principal

airports in nearby regions (i.e., Laguindingan in Cagayan

de Oro, General Santos, and Zamboanga City) serve as

important entry points to the BCT. There are four base

ports (Jolo, Bongao, Lamitan, and Malabang), 11 sub-ports,

and five private ports managed by the ARMM’s Regional

Ports and Management Authority. The Regional Economic

Zone Authority manages Polloc Port, a key facility for

regional economic development. The Philippine Ports

Authority manages Isabela Port in Basilan.

Despite intermittent improvements and rehabilitation

efforts, key facilities (Awang Airport and Polloc and

Bongao Ports) require comprehensive upgrading to

international standards, as these will be needed to

promote trade in the BIMP-EAGA sub-region and

ASEAN region and to release the economic potential of the

Bangsamoro.

The priority needs of airports in the BCT include new

passenger terminal facilities, security equipment, baggage-

handling equipment, parking facilities, firefighting equipment,

navigation facilities, and widening and lengthening of

runways and aprons. In seaports, the priority concerns are

the underutilization of Polloc Port and the need to improve

or rehabilitate port facilities. Institutional and capacity

weaknesses are likewise serious concerns, as evidenced by

unclear delineation of responsibility, poor maintenance, and

inadequate allocation of funds for maintenance.

A.4. Power Sector

The challenges in power generation and supply in the island

provinces of Bangsamoro are different in character from

Source: DPWH (2014)

Map 6: Major Airports and Seaports in Mindanao (2014)


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those in the mainland provinces of Mindanao. The five

electric cooperatives in Basilan, Sulu, and Tawi-Tawi have

small loads,74 high supply-chain costs, and a dispersed

customer base. They lack large industrial or commercial

loads.

On the main island, the two electric cooperatives (ECs)

(i.e., LASURECO in Lanao del Sur and MAGELCO in

Maguindanao) are connected to the main Mindanao grid

and, therefore, benefit from the much lower cost of bulk

power (see Table 16). However, these networks have

been starved of investment, and although there are some

industrial or commercial loads, the two ECs suffer from

frequent power shortages in the Mindanao grid as a whole.

As a result, though coverage at the municipal and barangay

levels is nearly universal across the Bangsamoro, the

household electrification rate is only 34% as compared

with the national rate of 74%; illegal connections are

pervasive; and service fee collections are poor.

For mainland Mindanao, the priority gaps/needs in the

power subsector include: (a) a more reliable electricity

supply; (b) increased collection efficiencies of ECs; (c)

viable solutions to the problem of illegal connections;

and (d) improving the capacity of ECs to forge innovative

arrangements that will encourage power generation

while raising collection fees. In Basilan, Sulu, and Tawi-

Tawi, the top priority involves availability and reliability

of electricity supply, and the promotion of a culture of

payment for service among consumers.

A.5. Flood Control

Flooding in low-lying areas of the BCT, particularly in

Maguindanao, is a continuing concern. The problem is

perennial in river systems of the Mindanao River Basin

(MRB)—such as the Rio Grande de Mindanao, Ambal-

Simuay River, Kabulnan River, and Libungan-Alamada

River—and wetlands, such as Ligawasan Marsh, Ebpanan

Marsh and Libungan Marsh. During the rainy season

or periods of high precipitation in the upper reaches

of the MRB, excess run-off water flows toward the sea,

passing near Cotabato City, causing flooding there and

in surrounding areas. The most flood-prone areas in the

BCT are Cotabato City in Maguindanao; Sultan Kudarat

(Nuling) and Parang in Maguindanao; Munai in Lanao

Source: NEA (2013)

Table 16: Status of Electrification in ARMM (2013)

ARMM Status of Electrification

Municipalities/Cities Barangays Connections

Coverage Energized

% Potential Energized completed

% Unenergized Potential Energized completed

%

Tawi-Tawi Electric Cooperative, Inc. 9 100 186 186 100 0 47,000 12,137 26

Siasi Electric Cooperative, Inc. 2 100 66 66 100 0 13,000 3,604 28

Sulu Electric Cooperative, Inc. 16 100 330 330 100 0 85,000 24,218 28

Basilan Electric Cooperative, Inc. 14 100 269 269 100 0 75,000 38,818 52

Cagayan de Sulu Electric Cooperative, Inc.

2 100 17 17 100 0 5,000 1,895 38

Lanao del Sur Electric Cooperative, Inc.

41 100 1,175 1,175 100 0 138,000 56,357 41

Maguindanao Electric Cooperative, Inc.

30 100 404 398 99 0 116,000 26,303 23

Total 114 100 2,447 2,441 99 0 479,000 163,332 34


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del Norte; Balo-i Kapatagan, Bubong, Ditsaan-Ramain,

Taraka, Tamparan, Lumbayanague, and Masiu in Lanao

del Sur; Pikit in North Cotabato; Jolo in Sulu; and Isabela

City in Basilan.

Some BCT areas are also prone to other types of disasters,

including storm surges, heavy siltation/landslides,

earthquakes, and tsunamis. Maguindanao, which is a

particularly high-risk area for earthquakes, is also among

the areas in the BCT that are at higher risk of earthquake-

induced shallow landslide. BCT areas that are vulnerable

to tsunamis include Cotabato City, Parang, Maguindanao,

the coastal towns of Lanao del Sur, Maguindanao, Sultan

Kudarat, Basilan, Sulu and Tawi-Tawi, and Isabela City in

Basilan. Further discussion of disaster vulnerability in the

Bangsamoro can be found in Chapter 10.

The pressing need to mitigate flooding in the BCT

calls for the following measures: (a) preventing rapid

deforestation and denudation of forest areas that help

prevent heavy siltation in river systems; (b) prohibiting

conversion of primary forests/forestlands into croplands

and settlement areas; and (c) strict implementation of

laws and policies relating to land use and garbage/waste

disposal.

A.6. Telecommunications

Mobile phones in the Philippines numbered just over

100 million as of the end of 2012, according to data from

local telecommunications companies. Internet access in

the country was limited to 33% of the population as of

end September 2011, compared with the Southeast Asia

regional average of 38%.

In 2010, according to the latest available data, 74% of

all ARMM had access to cellular phone signal, and 4%

had access to landline telephone systems.75 From the

transition period to the long term, the need for modern

telecommunications infrastructure will include the

full range of development purposes, from promoting

economic activity to building social cohesion. Attracting

massive commercial interest in this sector would have

to begin by ensuring the security of telecommunications

personnel and investments.

B. Strategic GoalsThe overall strategic goal is to develop a well-planned,

needs-based, and sustainable infrastructure network and

facilities that support five targeted strategies, as shown in

Table 17.

B.1. Roads and Bridges

During the transition, the strategy for roads and bridges

will be to: (a) sustain current efforts to improve national

roads through rehabilitation, reconstruction, upgrading,

and maintenance; (b) address the most immediate and

most un-served needs/gaps, especially at the barangay

or community level by paving FMRs and building new

ones; and (c) develop capacity in infrastructure planning,

feasibility preparation, project supervision/management,

and monitoring and evaluation for infrastructure staff.

The river network in the BCT can be tapped as an

alternative and low-cost mode of transport, especially for

passenger and agricultural produce. Construction of river

wharves would encourage development of this mode of

transport and enhance open access to hard-to-reach areas.

Construction of FMRs would facilitiate transport of

farm produce to municipal, provincial, and national

roads leading to processing and marketing centers. A

Bangsamoro road master plan will be formulated—with

emphasis on the connectivity within the hierarchy of road

networks, identifying the priorities for new construction,

rehabilitation, and regular maintenance work—and will

have a dedicated plan for FMRs.

In the short term, FMRs for which regular funding from

the ARG and national government is available should

be constructed without delay. Feasibility studies should

be undertaken for those given priority by Bangsamoro

communities in the CVEs so they can be included in the

priority projects for the Special Development Fund (SDF).


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During the transition period, national road projects will

be implemented by the Department of Public Works and

Highways (DPWH), while provincial and municipal road

projects will be done by the DPWH-ARMM (see Map 7).

Barangay road and FMR projects shall be implemented

by the Department of Agriculture (DA), Department of

Agriculture and Fisheries (DAF)-ARMM, Department of

Agrarian Reform (DAR), and DAR-ARMM.

The passage of the BBL, the successful conduct of a

plebiscite, and the creation of the BTA in 2016 are

envisioned to usher in a seamless transfer of functions and

turnover of national, local, and barangay/FMR projects

that are still ongoing, under terms and conditions spelled

out.

To prepare for this event, teams of qualified Bangsamoro

personnel could be created and the team members

subsequently be appointed to leadership positions in

planning, project implementation and supervision, and

monitoring of road and bridge projects particularly for

local roads and barangay/FMRs.

B.2. Irrigation

The development strategy for irrigation in the Bangsamoro

is to provide the funding needed to rehabilitate, improve,

and maintain existing systems and construct new ones.

In the case of communal irrigation systems (CIS),

the responsibility for improving, rehabilitating, and

maintaining existing systems and developing new

systems had been devolved to LGUs under the Local

Government Code (LGC) of 1991. As the limited

financial resources of LGUs have placed irrigation at

a low spending priority, the Bangsamoro Government

would be in the best position to intervene in this respect

during the medium-term.

In the short term, a Bangsamoro Irrigation Master Plan

will be needed, taking into consideration the different

irrigation needs of various agricultural crops and the

areas where they are planted. While current irrigation

efforts of the national government is biased toward rice

production, these will not properly respond to the crop

mix found in the Bangsamoro, given the predominance

of other crops (i.e., cassava, corn and coconut) grown in

the area.

Also, if growing of more high-value crops (i.e., banana,

palm oil, coffee, cacao, pineapple, and rubber) is to

be promoted, these will require different irrigation

systems. These requirements will have to be inputted in

the Irrigation Master Plan. Climate change adaptability

measures in the construction of irrigation facilities should

also be factored into the master plan.

Table 17: Infrastructure Strategies and Project Types

Targeted Strategies Project Types

a. Infrastructure to connect to economic growth centers

National, provincial roads and bridges; airports and seaports; telecommunications

b. Infrastructure to support production Farm-to-market roads (FMRs), irrigation facilities, small landing ports, energy requirements for economic activity

c. Infrastructure for access/social justice Access roads, household electrification (especially off-grid) for far-flung areas

d. Infrastructure to support security and normalization outcomes

Investments for the six priority camps and other requirements targeted for normalization

e. Infrastructure for climate-resilience, DRRM Flood control, retrofitting of existing infrastructure


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B.3. Airports and Seaports

For airports and seaports in the BCT, the development

strategy is to continue and expedite efforts to raise their

service levels through rehabilitation, improvement, new

construction, and maintenance. Preliminary engineering

and feasibility studies would need to be undertaken

during the transition period to determine the viability of

establishing an international airport in the BCT and of

building more airports to form part of a viable multi-modal

transport system in the region. Free and unhampered

movement of people and goods through airports and

seaports connected to an efficient land transport system

and good roads would be an important way of speeding

up development of the BCT, especially considering

the economic potential of domestic and international

tourism. It is noted that safety and security challenges may

continue and severely impact travel in the region.

B.4. Power Sector

For the power subsector, the strategy calls for: (a)

monitoring by the Bangsamoro leadership of the Central

Government’s and the private sector’s development

efforts in the Mindanao grid, and (b) formulation and

implementation of programs and projects to develop

renewable energy, particularly for off-grid areas.

The Bangsamoro leadership will need to identify

mechanisms through which institutional and technical

arrangements on power generation, transmission, and

distribution may be best coordinated with the Central

Government, as the Bangsamoro Government has

exclusive powers over Lake Lanao,76 and power generated

by two hydroelectric plants in the BCT (Agus 1 and Agus

2) is delivered to the Mindanao grid. The BTA would

need to study and arrange with the National Electrification

Source: DPWH (2014) and DOTC (2010)

Map 7: Transportation Network in the Bangsamoro (2014)


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Administration (NEA) and the Central Government how the

seven ECs operating in the BCT can be made responsible

to the BTA.

For the short term, the strategy includes raising the quality

of electricity services to realistic levels while laying the

groundwork for full improvement in the medium and the

long term, which will be crucial to the region’s sustainable

socioeconomic growth (see Map 8). This strategy includes:

(a) electrification and energy services; (b) EC support to

private sector commercial and industrial investment; and

(c) institutional strengthening of the Bangsamoro ECs.

B.4.1. Electrification and Energy Services

The strategy to increase connections has to recognize

that additional connections must be commercially viable.

Any proposed solution would need to recognize not

only the unique positions of the ECs—since they are

already providing services—but also the potential for

other players (NGOs, investors, private energy services

providers, and communities) to play important roles, in

some cases in partnership with each other and with the

ECs.

A strategy to accelerate access to modern energy in

the Bangsamoro should attempt to: (a) strengthen

the electrification function of the ECs both for grid

connections and solar home systems; (b) ensure credit

and subsidy flows to the ECs where grid rehabilitation,

extension, and intensification are necessary and viable;

(c) ensure that non-EC providers have non-discriminatory

access to subsidy funds for solar home system

solutions, such as those provided for in photovoltaic

(PV) mainstreaming; and (d) support service providers

with targeted information and educational campaigns,

particularly among households and communities on the

Source: NHTS (2009) DOE-NEA (2014)

Map 8: Barangay Access to Electricity and Electrification Projects in the Bangsamoro (2014–2015)

0 - 20.00

Percent of households withaccess to electricity


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critical role that fair and transparent fees-for-service play

in ensuring sustainable services.

B.4.2. Renewable Energy

The BCT has renewable energy (RE) resources that

have significant potential. Geothermal manifestations

are found in the mountains of Dakula, Malabang, and

Tuayan. Its complex river systems give the BCT an

estimated 7,380 megawatts of potential hydroelectric

power, in addition to those already being harnessed.

However, watershed degradation, aggravated by climate

change impacts, is affecting river flows that could

compromise hydropower availability.

The Bangsamoro also has wind resources that can be

harnessed for small wind systems for basic energy

services and rural electrification projects. As with the

rest of the country, solar and wind energy in the BCT can

be harnessed for rural electrification. Biomass is another

significant power source for the region. The extent of

biomass potential has recently been established for the

BCT, pioneered by Lamsan Power Corporation in Sultan

Kudarat, Maguindanao,77 which installed a 15-megawatt

(MW) power plant. Green Earth Enersource Corporation

has signified its intent to invest in a 4.6-MW biomass

power plant, as has the Philippine Trade Center, which

is also putting up its own power plant for its cornstarch

milling plant in Sultan Kudarat, Maguindanao.

For ocean energy, a promising site for ocean thermal

conversion (OTEC) lies 18 kms from the town of

Omosmorata, in Basilan.78 These potentials will have

to be considered with long-term financial viability and

sustainability in mind. To translate these potentials

into reality, the Bangsamoro Government will need to

undertake the following:

a. Inventory of the available RE sources through

resource assessments;

b. Formulation of RE Development Plans to translate

RE resource potential to reliable sources of power,

especially for off-grid communities; and

c. Showcase household and community level RE

applications, especially for productive purposes.

B.4.3. Electrical Cooperative Support to Commercial and Industrial Investment

To provide good-quality, reliable, and cost-effective

power that will encourage private-sector investment,

which in turn will generate employment, the BDP

recommends an engagement strategy (similar to that being

proposed by Unifrutti with MAGELCO)79 that will benefit

all stakeholders: the new investors that need power

solutions, the ECs that will be strengthened operationally

and financially, and households that will have new

opportunities for electrification. This approach could

also be promoted in declared export-processing zones

in the region, for potential locators with large energy

requirements. Excess power generated in the zones could

be sold to outside consumers at lower costs.

This model can be applied to all major investments that

require dedicated infrastructure, although cases will have

to be assessed on an individual basis. The lack of a grid

in Basilan, Sulu, and Tawi-Tawi will be a constraining

factor, as generating reliable power there will involve at

least some oil-fired power generation (even if the system is

hybridized by also incorporating renewable energy).

B.4.4. Institutional Strengthening of the Bangsamoro Electrical Cooperatives

A key challenge confronting the Bangsamoro Government

involves the seven ECs operating in the BCT. While the

Bangsamoro has exclusive power over the regulation of

power generation, transmission, and distribution operating

exclusively in the BCT, the Small Power Utilities Group

of the Central Government’s National Power Corporation

(NPC) will continue to provide its technical expertise

during the transition period in increasing generating

capacities that feed electricity to consumers through ECs

operating in Basilan, Sulu, and Tawi-Tawi.

There needs to be a focus on building capacity in

energy services, emphasizing not only the connection


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aspect, but also important long-term relationships with

customers of all kinds. This has not been straightforward

in the Bangsamoro, where utility company employees

have often been injured and sometimes killed by

customers, and where today, for example, some of the

secured meter installations that have been rolled out in

LASURECO have been vandalized or destroyed.

Technical assistance is being extended to MAGELCO

with respect to: (a) working with private-sector investors;

(b) executing front-end engineering design (FEED) and

detailed engineering design (DED) studies for sub-

transmission assets; (c) conducting competitive and

transparent procurement; (d) supervising contractor

installation of lines and substations; (e) working

with lenders on satisfactory security and collateral

provisions; (f) managing commercial relationships with

large customers; and (g) managing processes related

to environmental, social, and gender impacts in their

investment operations. Similar assistance should be

extended to other ECs across the Bangsamoro.

Mounting debts to the NEA and NPC seriously affect

the ECs’ financial condition, which results in further

deterioration of services. There are possibilities,

however, of legislation under which interest charges of

ECs’ arrears to the NEA and NPC directors may also be

changed. The Bangsamoro leadership could reach out

to all EC consumers that “business as usual” with regard

to nonpayment of electric bills would no longer be

tolerated.

B.5. Flooding

Flooding in the BCT can be addressed by creating and

maintaining partnerships with the local communities

for watershed protection and through rehabilitation

programs. Only through such sustainable partnerships

can successful reforestation programs be implemented

on a sustainable basis. If people living in the forest

areas participate in reforestation programs and are

compensated for protecting the forestlands or for planting

trees, they will have greater motivation to protect the

forest. The needs will have to be regularly monitored to

ensure that reforestation targets are met.

The challenge is to make people living in forestlands

aware and cognizant of the dire consequences of

deforestation to those living in flood plains. Likewise, it

is a challenge to the Bangsamoro leadership to provide

people living in the forests with sources of livelihood

other than using fallen trees (which are typically

converted into charcoal).

C. Summary of Priority ProgramsTable 18 sets out priority infrastructure interventions.


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Objectives Priority Programs Components

Increase volume of passengers and goods, road density

Strengthening the Bangsamoro Infrastructure and Logistics System

• Roads and bridges (FMRs), airport and seaport upgrading for the islands • Developing a transport and logistics masterplan

(including a dedicated plan for FMRs) for the Bangsamoro that identifies and prioritizes road network development of FMRs, municipal, provincial and national roads

• Tapping the river network of the BCT as alternative and low-cost mode of transport• Improving drainage system• Study feasibility of reopening Balo-i and Malabang airports and developing an international airport for the Bangsamoro• Establishment of quick roads/bridges repair and maintenance system in BCT

Increase household access to electricity

Energy • Energy and household electrification investments (grid and off-grid)• Identifying mechanisms on the use of Lake Lanao waters for power generation• Establishing mini-hydro electric power plants• Revisiting and reviewing the Mini-Hydro Power Generation Study• Inventory and assessment of Renewable Energy sources, including feasibility and engineering studies• Renewable Energy Development Plans for BCT provinces• Showcasing stand-alone household and community renewable energy applications • Strengthening Bangsamoro Electric Cooperatives through

better partnerships with private investors and institutional development programs

Enhance capacity of Bangsamoro communities to adapt to climate change and undertake DRRM for social justice and to mitigate displacement

CCA/DRRM-Responsive Infrastructure • Ambal-Simuay River Flood Control• Slope protection• Creating and maintaining partnerships with local communities for watershed protection and rehabilitation programs

72 This chapter deals only with economic physical infrastructure. Infrastructure relating to social services (schools, hospitals, water and sanitation, etc.) is discussed in Chapter 9.

73 In the absence of FMRs, traders who have access to transportation can more easily monopolize trade in the area. This allows them to dictate the farmgate prices paid to the farmers, particularly for perishable goods.

74 Electricity demand in terms of connected megawatts (MW) and energy consumption in kilowatt/hours (kWh).75 Philippine Statistics Authority-Census on Population and Housing (2010).76 This is one of the powers exclusive to the Bangsamoro Government as provided in the “Annex on Power Sharing” of the FAB. 77 Philippine Information Agency, PhP 2.5 B investments poured in ARMM in 1st semester of 2014. 78 Benito (2014).79 Unifrutti, an agribusiness investor, is contemplating a major investment in banana plantations. It will need reliable power for the company’s deep

bore well irrigation systems and packing sheds; the load of close to 10 MW will double MAGELCO’s current peak load and give it a no-loss, full-paying customer. Technical losses on the MAGELCO system will be cut in half, the collection rate will double, and revenues will more than double. By far the cheapest solution for Unifrutti will involve 69 kV sub-transmission lines and associated substations that will be owned and operated by MAGELCO; these facilities will support an expansion of MAGELCO services to other users as well, such as the existing households and market areas and new ones that will come as Unifrutti makes its investments. However, MAGELCO is not creditworthy; the key to it being able to play its role reliably is to do so in partnership with Unifrutti, lenders, government agencies, and donors. An emerging concept would enable MAGELCO to borrow to construct the power infrastructure, with revenue for electricity services to Unifrutti sequestered so that lenders are assured of payment.

NOTES

Table 18: Priority Infrastructure Programs

infrastructure - bangsamoro development...

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