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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   ater 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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