Japan has extended 771 million yen (P340 million) grant aid to the Philippines to support the energy sector at a war-torn areas in Mindanao.

The grant agreement for the Improvement of Equipment for Power Distribution in Bangsamoro Area was signed in a ceremony at the National Economic and Development Authority headquarters in Pasig City on Thursday.

The project, led by the National Electrification Administration, aims to stabilize power supply in the Bangsamoro areas by providing power distribution equipment, such as transformers, poles, conductors and 16 boom trucks among electric cooperatives.

It is expected to be implemented from 2017 to 2019.

"One of the concerns in the Bangsamoro is the electricity losses from aging energy equipment built in the 70s. JICA learned that energy distribution losses averages 26 percent due to the old equipment being used for power distribution," said JICA Chief Representative Susumu Ito.

By upgrading equipment, he said JICA sees bright prospects in resolving the Bangsamoro power supply issues and create more economic activities in the region.

“This project is part of our continuing commitment to support peace and development in Mindanao,” he said.

NEDA Director General Ernesto Pernia, during the signing ceremony, said household electrification level in the Bangsamoro area is only at 72.38 percent.

"We wish to thank the Japanese Government for its invaluable support for the implementation of this Project, as well as other priority programs and projects of the Philippine Government being the country’s top source of Official Development assistance," Pernia said.

Government poverty statistics data in 2015 showed that the Autonomous Region in Muslim Mindanao remains mired in poverty with 53.4 percent poverty rate, higher than the national average of 21.1 percent. Forty years of conflict have deprived this region of opportunities to access social services and quality investments and jobs.

JICA said its grant aid will help reduce the energy distribution losses to about 7 percent and assure reliable, resilient energy supply to nearly 44,000 households in the area. Celerina Monte/DMS