Philippines: Philippine Energy Efficiency Project

Sovereign Project | 42001-013

Summary

The Project will (i) retrofit about 40 government-owned office buildings with efficient lighting; (ii) procure 13 million compact fluorescent lamps (CFLs) for distribution to residential and other customers to reduce peak power demand; (iii) introduce energy-efficient lamps for public lighting; (iv) set up a laboratory for testing energy-efficient appliances and a lamp waste management facility; (v) establish a super energy service company (ESCO) to support ESCO development; (vi) promote an efficient-building initiative; and (vii) develop and implement a communication and social mobilization program.

Various minor changes in scope have been processed since implementation started and are reported in each component of this project record.

Latest Project Documents


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Project Name Philippine Energy Efficiency Project
Project Number 42001-013
Country Philippines
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2507-PHI: Philippine Energy Efficiency Project
Ordinary capital resources US$ 31.10 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector

Energy - Energy efficiency and conservation

Gender Equity and Mainstreaming Some gender elements
Description

The Project will (i) retrofit about 40 government-owned office buildings with efficient lighting; (ii) procure 13 million compact fluorescent lamps (CFLs) for distribution to residential and other customers to reduce peak power demand; (iii) introduce energy-efficient lamps for public lighting; (iv) set up a laboratory for testing energy-efficient appliances and a lamp waste management facility; (v) establish a super energy service company (ESCO) to support ESCO development; (vi) promote an efficient-building initiative; and (vii) develop and implement a communication and social mobilization program.

Various minor changes in scope have been processed since implementation started and are reported in each component of this project record.

Project Rationale and Linkage to Country/Regional Strategy

Philippine consumers spend a large part of their household income on energy; the country's electricity tariffs are among the highest in the region. This situation has become even worse with recent oil price increases and is likely to continue in the short to medium term as the Government cannot influence high oil prices. The introduction of competition through open access and targeting existing subsidies can only reduce electricity tariffs in the medium to long term. The Government is focusing on increasing the use of indigenous renewable energy generation (such as geothermal, biomass, wind, and hydropower) and promoting energy efficiency to meet these challenges.

The Government recognizes that it alone cannot identify and finance the various energy-efficiency initiatives. Studies carried out by the Department of Energy (DOE) with assistance from the Asian Development Bank (ADB) demonstrate that by investing $46.5 million in energy efficiency, the Government could defer

$450 million of investments in new power plants, and save about $100 million annually in fuel cost.

The Project's purpose is to reduce the peak load power demand by implementing an energy-efficiency program, with particular focus on efficient lighting that will contribute to greenhouse gas reduction. Carbon credits will be sought following the methodology approved by the executive board of the Clean Development Mechanism. The Project is economically and financially sound with an economic internal rate of return of 99% and a financial internal rate of return of 206% compared with the weighted average cost of capital of 2.4%. For the CFL distribution component, the payback period is less than 1 year, making the investment cash flow positive in the first year. The economic and financial internal rates of return calculations do not include the value of Clean Development Mechanism credits generated by the Project.

Impact Cost of power generation reduced
Project Outcome
Description of Outcome Consumers' energy cost reduced by use of efficient lighting
Progress Toward Outcome As of 31 December 2013, the Project is physically completed based on the revised Project scope.
Implementation Progress
Description of Project Outputs

1. Lighting retrofits in selected government buildings

2. Thirteen (13) million CFLs distributed to consumers

3. Implementation of energy efficient public lighting programs

4. Expansion of testing laboratory capacity and establishment of a waste management facility

5. Establishment of the super ESCO

6. Certification system for energy-efficient buildings operating

7. Implementation of a communication and social mobilization program

Status of Implementation Progress (Outputs, Activities, and Issues)

Output completed. Overall annual energy savings of 11.05 GWh in 150 retrofitted government buildings by June 2013.

Component completed.

completed

completed.

component cancelled

component completed

component completed.

Geographical Location Philippines with subprojects in selected regions
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Environmental benefits include less air pollution through the reduction of local emissions of sulfur dioxides; nitrogen oxides; particulate matters; and most importantly, CO2. The component addressing lamp waste management will include the collection of spent fluorescent lamps from households, institutions, and business establishments. The facility will enable consumers to dispose of fluorescent lamps without damaging the environment. Disposal of spent CFLs and fluorescent tube lamps in landfills is among the primary sources of mercury pollution that could migrate to groundwater and also become airborne. Recovery of glass tubes, aluminum, mercury, and other lamp components by the recycling facility would reduce the need for production of raw materials. Mercury emission during recycling is negligible. The recycling facility has air emission control equipment to ensure that mercury levels comply with applicable standards. Regular monitoring of indoor air quality will be undertaken during operation. Transport, storage, handling, and packaging of recycled materials mercury in particular will be in accordance with the requirements of the Republic Act 6969 (an act to control toxic substances and hazardous and nuclear wastes).
Involuntary Resettlement
Indigenous Peoples The Project will cover the entire country. The project beneficiaries are customers from all ethnic groups. The Project will have no negative impact on ethnic minority groups. The social mobilization program for procurement of CFLs will prepare brochures, which will be in the local language and extensive graphics will be used for easy understanding by all. Specific measures in social mobilization will be included so that lifeline and ethnic groups understand the benefits of CFLs.
Stakeholder Communication, Participation, and Consultation
During Project Design The project design involved participation of a wide range of stakeholders, including the electric cooperatives that will be implementing the Project under the leadership of NEA. The wide range of consultation has helped develop a sense of ownership by all. The Department of Finance has allocated the necessary amount of counterpart funding for the Project. The distribution of CFLs will accelerate the switching from incandescent bulbs to CFLs by all customers.
During Project Implementation An integrated campaign will be launched based on the detailed marketing plan developed with the Government during project preparation. The communication plan themes are (i) widespread awareness, (ii) widespread understanding, (iii) cooperation and participation, (iv) development of a sense of urgency, and (v) community ownership.
Business Opportunities
Consulting Services An international consulting firm engaged to design (scale up project) and manage the project. The firm to deliver 127 person-months of consulting services following ADB's quality- and cost-based selection procedures.
Procurement Works and goods include (i) retrofitting of government buildings with T8 flourescent tube lamps and electronic ballasts. Scope includes supply, installation and disposal of old fittings; (ii) supply of compact fluorescent lamps; (iii) supply of LED lamps; (iv) supply and installation of street and traffic lights in selected rural electric cooperatives, including disposal of redundant fittings and posts; (v) supply, installation and commissioning of lamp waste management facility; and (vi) supply and installation of lab test facilities and equipment, program management and capacity building.
Responsible ADB Officer Rehan Kausar
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Executing Agencies
Department of EnergyMr Angelo Reyessatr@doe.gov.phenergy center, Merritt Rd., Fort Bonifacio, Taguig, Metro Manila, Philippines
Timetable
Concept Clearance 29 Jan 2009
Fact Finding 21 Apr 2008 to 25 Apr 2008
MRM 15 Jul 2008
Approval 29 Jan 2009
Last Review Mission -
PDS Creation Date 26 May 2008
Last PDS Update 20 Mar 2014

Grant 0142-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jan 2009 02 Mar 2009 28 May 2009 31 Oct 2011 30 Jun 2013 11 Oct 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.00 Cumulative Contract Awards
ADB 0.00 29 Jan 2009 0.00 1.04 69%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 29 Jan 2009 0.00 1.04 69%

Loan 2507-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jan 2009 02 Mar 2009 28 May 2009 31 Oct 2011 31 Dec 2013 08 May 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 45.00 Cumulative Contract Awards
ADB 31.10 29 Jan 2009 24.54 0.00 100%
Counterpart 13.90 Cumulative Disbursements
Cofinancing 0.00 29 Jan 2009 24.54 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - Satisfactory - Satisfactory

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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  • 26 Jun 2013 | Article

    Energy Efficiency in Asia and the Pacific

    Demand-side energy efficiency is highly cost-effective and has the potential to be a main driver for enhancing energy security in Asia and the Pacific.
  • 08 Nov 2010 | Project Result / Case Study

    A Bright Idea for Energy Reduction

    The Philippines is replacing energy-wasting light bulbs with more efficient fluorescent bulbs, promising to save millions of pesos - and bulbs - and to reduce debilitating power failures. Cebu City, Cebu - Prodded by persistent power shortages, the Philippines government has turned to the humble light bulb to help end debilitating power failures in major urban centers, among them Cebu City - the fastest-growing in the country and second only to Metro Manila as an important industrial and cultural hub.
  • 16 May 2012 | Infographic

    Philippines: Lighting Up the Boni Tunnel

    A poorly lit four-lane tunnel that crosses one of Metro Manila’s key thoroughfares has been illuminated using solar technology and a public-private partnership supported by ADB. The sub-standard lights of the Boni Tunnel, which intersects EDSA, were replaced with solar-powered light emitting diodes or LEDs.