Working Towards Building a Green Economy and Sustainable Local Communities

DILGUNEPUNDP

Improving access of local communities to quality, secured and sustainable energy in the Philippines

PLENARY SESSION 1 OPEN FORUM ON THE PHILIPPINES ENERGY SECTOR DURING THE NG-LG JOINT ENERGY FORUM HELD LAST 6 SEPTEMBER 2013 AT HERITAGE HOTEL, PASAY CITY

On 06 September 2013, the Department of the Interior and Local Government through its Philippines Poverty-Environment Initiative Program (PPEI), in cooperation with the Department of Energy, conducted a National Government-Local Government Joint Energy Forum. Over 400 local government units (LGUs) from all over Philippines discussed with industry leaders and representatives from various government agencies means to improve the access of local communities to quality, secured and sustainable energy.
 
“LGUs have an overriding role in approving the construction of power plants and energy facilities, as well as facilitating energy investments” said Philippines Energy Secretary Carlos Jericho L. Petilla.
 
The Forum highlighted current state, gaps and opportunities of the energy sector in the Philippines. The benefits to host communities of energy projects, managing downstream industry, improving financing access of LGUs to energy projects and how to promote renewable energy were among the topics deeply discussed.

Other officials from the DOE also discussed several initiatives, statutes and laws relative to the energy sector such as the Energy Regulation 1-94 otherwise known as the Benefits for Host Communities, and several components of the Renewable Energy Act of 2008 and Oil Deregulation Law of 1998 concerning the LGUs.

Catalyzing energy investment

Bank of the Philippine Island’s Executive Vice President Alfonso L. Salcedo, Jr. discussed a range of financing options appropriate to fund different types of energy projects and described the major challenges in LGU financing. He pointed out that there are various organizations, programs and facilities that are currently in place to finance energy projects and increase LGU access to financing. The facilities blend public and private finance, loan guarantee mechanism and energy service company financing scheme. Further, he emphasized that LGUs should take a more active role to drive energy efficiency projects. In order to make energy projects bankable, LGUs must ensure project viability (fulfils social and economic needs of the community; good revenue streams); partner with reliable stakeholders; be open to outsourcing and management of the project, and ensure completeness of the regulatory requirements.

Another financing option available for LGUs is through a Joint Venture Public-Private Partnerships (PPP). Atty. Sherry Ann Austria of the Philippines PPP Center mentioned that “PPP is one of the key strategies identified by the Aquino administration to fast track infrastructure development and achieve inclusive growth. The Program taps the private sector to help supplement limited public sector capacities in delivering critical infrastructure and development services and facilities”.

Vice President Michael B.C. Hosillos of SN Aboitiz Power Group (SNAP) also shared to the participants how to create a shared value in energy investments. He emphasized that the pillars of private companies’ Corporate Social Responsibility (CSR), as practiced by SNAP, should be its community, environment, market and employees.

Accelerating green industries in local communities

With the Philippines endowed with tremendous renewable energy resources; jobs, wealth and cost-saving renewable energy can bring to the country.

Mr. Jasper Inventor of the Greenpeace Philippines talked about how renewable energy can save money and generate jobs.

  • Generate tens of thousands of jobs (For a 10-MW solar power plant, around 1,000 people are hired during construction for 6 months and 100 people are hired full time; For wind, a 33-MW facility created 21 direct jobs, two thirds of which are on site; A representative 8-MW run of river hydro plant employs around 1,000 people during construction; One geothermal company hired around 2,582 employees with an installed capacity of 1,189 MW plant; and Seven proposed biomass projects could generate roughly 78,000 jobs to construct power plants, 3,400-4,000 jobs for plant operation, 7,000 in the feedstock supply chain, and additional employment for the farmers producing agricultural wastes);
  • Save the government money in terms of tax revenue and foreign exchange savings;
  • Boost economic growth especially in vulnerable areas suffering from energy poverty;
  • Lower the cost of renewable energy for the long run by impacting the spot market, and
  • Save customers’ money.

Local governments as drivers of achieving sustainable energy

The Forum also allowed pioneering LGUs to share their experience using energy revenues and resources to reduce poverty and to protect the environment.
 
“The local governments play a more important and critical role on the effective and efficient exploration, development and utilization of the energy resources while protecting the environment within their territorial boundaries. They are empowered by law (Local Government Code of 1991) to take innovative decisions for this purpose” said Regional Director Evelyn A. Trompeta of the Department of Interior and Local Government.