Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 21 Dec 2009
PDS Updated as of 10 Mar 2014

Project Name Mitigation of Climate Change through Increased Energy Efficiency and the Use of Clean Energy
Country Philippines
Project/Program Number 43207-012
Status Approved
Geographical Location Nationwide
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Energy
/ Energy efficiency and conservation
Thematic Classification Capacity development
Economic growth
Environmental sustainability
Gender Mainstreaming Categories Some gender benefits

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Technical Assistance7754Japan Special Fund700
Technical Assistance7754Technical Assistance Special Fund225
Counterpart 175
TOTAL US$ 1,100

Summary of Environmental and Social Issues

Customers in some off-grid areas will be provided with solar generation under a pilot program to evaluate the effectiveness of the "net metering" principle of the new Renewable Energy Law. This initiative will increase the environment's carrying capacity to support the country's sustained economic growth, reducing poverty in the process. The Project will distribute good quality and reliable power to existing consumers with lower losses. An objective of the Project is to promote energy-efficient air-conditioners and refrigerators. The beneficiary of the Project will be households who will also learn about other affordable energy-efficient choices for reducing household expenditures on energy.

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation
Several international and national individual consultants have already been engaged and mobilized to do initial discussions and consultations in preparing the detailed design and mechanism for the energy efficiency components--for improved efficiency in the use of electricity (energy efficient appliances) and efficient electric transport. Energy efficient transport: since April 2011, the project team and the government have been actively engaging with a range of stakeholders--the tricycle drivers, suppliers, manufacturers, government officials, nongovernment organizations, lawmakers, academic institutions on the project design. Energy efficient appliances: a well designed awareness and demonstration campaign for energy efficient televisions was conducted by the government from 16-22 August 2012. This demonstration campaign aimed to intensify awareness on energy efficiency by the consumers, specifically, to educate households about the high energy consumption of old and inefficient TV sets.

Description

This will cover activities under the broad umbrella of energy efficiency and clean energy, where large investment are needed to support government's plan. The project's concept paper was approved last year and ADB recruit a range of individual consultants to prepare the proposed components. The proposed components for study are: (i) energy efficiency: distribution (as hire purchase) of energy efficienct appliances (TV, air-conditioners, fridges and fans). These component may also finance scaling up the public-lighting and efficienct buildings components of the Philippine Energy Efficient project. (ii) market for electric vehicle: distributing (lease or hire purchase) about 20,000 electric tricycles replacing 2 stroke and 4 stroke tricycles that are common in metro-Manila (200,000 units) and across the country (3,500,000 units). Tricycles produce about 10 million tons of CO2 in the Philippines. The ensuing loan, Market Transformation through Introduction of Energy-Efficient Electric Vehicles Project (the e-trike project) was approved on 11 December 2012. The balance of the TA fund is being used to assist the EA in: (i) promoting and marketing the e-Trikes to the local government units; (ii) launching industry meeting/s on the technical aspects of the project; (iii) strengthening capacity of DOE staff on procurement and implementation; (iv) preparing a report and outline of an Operations Manual highlighting procedural flows, timelines, documentary and other requirements, procurement, financial, and logistical plans; (v) providing technical support in the establishment and pilot operation of the charging infrastructure including the installation of solar charging stations; and (vi) providing technical and administrative support to secure UNFCCC registration.

Project Rationale and Linkage to Country/Regional Strategy

The Philippines is a net importer of energy, mostly in the form of fossil fuels; the demand for energy is also growing with increased population, rapid urbanization, improved lifestyle and overall economic growth. Use of fossil fuels is causing climate change and will severely impact this archipelago country of more than 7000 islands. Hence the Governments main policy challenges are: tackling climate change, reduce reliance on imported fossil fuels, and improve energy security ensure reliable, stable and sustainable supply of energy at affordable prices and at an acceptable social cost. Investments in indigenous renewable energy and energy efficiency (clean energy) will address all these challenges, but the market in its current form is unable to attract necessary investments in clean energy. As most fossil fuels are imported, increased CO2 emission is a proxy for greater reliance on imported energy. Under a business as usual scenario, between 2007 and 2030: the total greenhouse gas emissions for the power sector will increase by 400% (from 26 MtCO2e to 140 MtCO2e); and for the transport sector by more than 200% (from 29 MtCO2e to 95 MtCO2e) driven by substantial increase of import of crude oil (for transport) and coal (for power generation). Despite large potentials for renewable energy, new coal power plants are being planned, as a least cost solution, and by 2030, coal power plants will contribute more than 90% of the total CO2 emissions. Emissions from the transport sector represents 30% of all pollution, and a large part is contributed by the inefficient old form of public transport tricycles (3.5 million) and Jeepneys (250,000) with poor quality engines. CO2 Emission from the motorcycles and tricycles alone accounts for more than 10 million tons per year. An alternative scenario with net increase of emission by only about 15% to 30% by 2030 is possible with about 10% to 15% increase in energy efficiency across all sectors and increased use of renewable energy. Energy efficiency, the key component of this alternative scenario, is also an essential tool for lessening the impact of possible increase in electricity prices, caused by the universal charge that may be imposed on all customers to finance the proposed incentives for renewable energy . The Government is committed to energy efficiency, and has developed the energy efficiency roadmap during the 2008 Philippine Energy Summit through extensive consultation with all stakeholders. Although relatively speaking, because of the high electricity price, clean energy projects are financially more attractive in the Philippines, unfortunately, without broad market transformation new technology, policy, institutions, investors, incentives, consumer awareness and wider consumer acceptance the alternative scenario cannot be achieved. This will study a range of options for energy efficiency and energy efficienct electric vehicles.

Development Impact

The loan project will reduce power sector's CO2 emissions through (i) efficient use of energy, and (ii) identification of the best technology for solar power (either stand alone or hybrid) and by development of a working model for net metering and feed in tariff allowed by the new Renewable Energy Law.

Project Outcome

Description of Outcome
The investment project will contribute the Government's ongoing initiatives to: (a) improve energy security, (b) increase access to power (c) reduce consumers energy cost through energy efficiency, (d) lower peak demand, and (e) increase society's awareness of energy efficiency and solar generation.
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
The expected outputs are sector studies, design of pilot projects with complete technical, financial and economic analysis and implementation arrangements for scale up.
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2011 Mar 18
Consulting Services
The proposed MFF will be prepared using consultants under the Renewable Energy component of RETA 6441 (for hydropower, wind, and tricycle related outputs) and consultants under this technical assistance. A range of individual consultants will be hired to supplement staff resources for study of the components, on a need basis by July 2011, and would cover priority areas including: (i) efficient appliances, (ii) solar net metering pilot, (iii) loss reduction initiatives at Electric Cooperatives, (iv) support for feed-in in tariff development, (v) awareness building for clean energy, and (vi) a household and commercial appliance use survey (air-con, TV, fans, refrigerators).
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/43207-012/business-opportunities

Timetable

Concept Clearance
Fact-finding
Management Review Meeting
Approval 16 Dec 2010
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Technical Assistance 7754 16 Dec 2010 24 Feb 2011 24 Feb 2011 31 Aug 2011 31 Aug 2014

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

TA Amount (US$ thousand)

Approval Number Approved Amount Revised Amount Total Commitment Uncommitted Balance Total Disbursement Undisbursed Balance
Technical Assistance 7754 925 925 900 25 827 98

Contacts and Update Details

Responsible ADB Officer Sohail Hasnie (shasnie@adb.org)
Responsible ADB Department Southeast Asia Department
Responsible ADB Divisions Energy Division, SERD
Executing Agencies Department of Energy

Links

Project Website http://www.adb.org/projects/43207-012/main
List of Project Documents http://www.adb.org/projects/43207-012/documents