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Guarantee


LGUGC guarantees the indebtedness of local government units (LGUs), water districts (WDs), electric cooperatives, renewable energy technology providers and state universities and colleges. The guarantee fee is a function of the underlying borrower and project risks.  Fees may range from 1% to 2% per annum. Guarantee facility, eligibility criteria and documentary requirements (See file: Eligibility_Reqts)


Credit Rating

LGUGC implements an internal LGU credit screening and rating system in the absence of a formal stand-alone entity specializing in risk evaluation of LGUs. The LCSRS adopts internationally-accepted standards fit for due diligence requirements of private  Financial Institutions and individual investors as well.  The  system serves as the primary guide for both the LGUGC and Financial Institutions to identify LGUs that are primed for the commercial credit market. More importantly, the credit rating system establishes the LGU’s willingness to honor contractual obligations in addition to its capacity to pay.  It is also a tool for LGUs toward better local governance.

Until such time that an independent and reputable rating agency is established, LGUGC will continue to disseminate screening and rating information to the public  on a regular basis. (See file: LCSRS)


Program Management


The LGUGC offers program management services. Currently, LGUGC is managing the guarantee fund for Electric Cooperative System Loss Reduction Project (ECSLRP) of the World Bank – Global Environment Facility (WB-GEF) thru the Department of Energy (DOE). LGUGC has likewise been appointed as the program manager for the Capacity Building to Remove Barriers to Renewable Energy Development (CBRED) - Loan Guarantee Fund of the UNDP in November 2006 by DOE.


ELIGIBLE PROJECTS FOR:

LGUs

Water Districts

MLEs

EC-PCG

CBRED-LGF

  • Agri-business and food production projects
  • Development of industrial estates
  • Hospitals and healthcare centers
  • Power plant and distribution systems
  • Public market
  • Public transportation facilities and government housing development
  • School and day care centers
  • Slaughterhouse
  • Telephone and communication systems
  • Water source development and protection
  • Treatment and distribution (Level III)
  • Sanitation
  • System upgrading and reduction of water losses
  • Support facilities
  • Bulk water supply
  • Rehabilitation and expansion
  • Toll roads and bridges
  • Tourism promotion and development projects
  • Water supply, sewage and sanitation systems
  • Solid waste management
  • Contracts (including BOT and JV) with local government units, government-owned and controlled corporations and government agencies for infrastructure projects (MLEs)
  • Contracts with top 1,000 corporations for infrastructure projects (MLEs)
  • Other projects acceptable to the LGUGC Board

 

  • Rehabilitation and capacity upgrades of existing supply system (including purchase of second-hand sub- transmission facility) to improve the reliability, efficiency and safety of supply system and the quality of service to customers
  • Removal of supply system constraints
  • Institutional development of ECs
  • Purchase of necessary hardware, software, motor vehicles, tools and equipment to improve employee productivity and customer service efficiency
  • Hydropower (Pico-hydro, Micro-hydro, Mini-hydro)
  • Biomass-based systems (Biogas, direct burning for power and non-power applications)
  • Wind (power and non-power)
  • Geothermal (Waste heat recovery)
 

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