The Department of Energy (DOE) said a new debt restructuring agreement between Kaltimex Rural Energy Corp. and the Tawi-Tawi Electric Cooperative (Tawelco) is expected to address around P400 million in unpaid obligations and help stabilize electricity service in the province, particularly in Bongao.
DOE Undersecretary Rowena Cristina Guevara said the agreement, signed on December 15, aims to restore Tawelco’s financial health and improve daily operations, especially in geographically isolated and disadvantaged areas.
Under the deal, Tawelco will make an upfront payment of P10 million and settle the remaining arrears through a structured payment plan. The agreement includes performance targets such as reducing system losses, achieving full billing coverage, and improving collection efficiency. A three-month grace period will apply for missed payments before penalties are imposed.
Tawelco has struggled with financial and operational problems in recent years, leading to mounting debts. In response, the National Electrification Administration reorganized the cooperative’s leadership, with a new management team taking over in June 2022.
Because Tawelco is not currently eligible for bank refinancing, the DOE said the partnership with Kaltimex is a key step toward recovery. Kaltimex will also provide a 5-kilometer dedicated feeder line to help connect new customers without requiring additional loans. Revenues from these new connections will help fund debt payments.
In parallel, the DOE endorsed Kaltimex’s request for a 10 percent increase in Tawelco’s allowable capacity to the Energy Regulatory Commission. This is expected to strengthen reserve power, reduce reliance on rented generators, and lower the risk of outages during peak demand and emergencies.
The agreement also requires monthly performance reviews, completion of priority infrastructure projects, and training programs for Tawelco staff to ensure long-term improvements.
Tawelco provides electricity across the entire province of Tawi-Tawi, including remote islands such as Taganak, serving more than 11,000 customers, mostly residential users.
