USG-PHILIPPINES RENEWABLE ENERGY PARTNERSHIPS

UNCLAS SECTION 01 OF 02 MANILA 001283 SIPDIS STATE FOR EROSE AND LHAWLEY USAID FOR LGUTIERREZ USTDA FOR DROSSITER E.O. 12958: N/A TAGS: SENV TRGY TSPL ECIN ECON APECO ENRG EAID PGOV RP SUBJECT: USG-PHILIPPINES RENEWABLE ENERGY PARTNERSHIPS Ref: STATE 52444 ¶1. Summary: The U.S. Agency for International Development (USAID) and U.S. Trade and Development Agency (USTDA) both assist the Philippines in renewable, clean, and efficient energy projects. USG agencies are also facilitating regional conferences on climate change and clean energy. USAID and the Asian Development Bank will host the fourth Climate and Clean Energy Week at the Bank's Headquarters in Manila from June 15-19, 2009. End Summary. USAID Energy Projects -------------- ¶2. USAID Philippines manages three energy projects which it funds for $2-3 million annually. The projects focus on four goals: (1) improved energy sector planning, policy formulation and increased public understanding and support for reforms; (2) strengthened Energy Regulatory Commission as an independent and credible regulator that fosters competition, encourages private investment and prevents anti-competitive behavior; (3) electrification of off-grid communities in conflict-affected areas of Mindanao using renewable energy; and (4) reduction of greenhouse gases by improving policies and improving access to information and technology that encourages the use of cleaner fuels and energy efficiency. ¶3. For the third consecutive year, USAID has jointly organized the Asia Clean Energy Forum with the Asian Development Bank on June 15-19 at ADB headquarters in Manila. This support is administered through the USAID's ECO-Asia Clean Development and Climate Program under the Regional Development Mechanism for Asia. The Forum provides a venue to exchange experiences and forge new partnerships to advance clean energy solutions in the region. The week-long event will promote best practices in policy and finance and generate solutions to the region's climate and energy security challenges. ECO-Asia's Clean Development and Climate Program works with Asian governments and industry in three areas: (1) Saving energy through efficient lighting; (2) Increasing power production and reducing coal use; and (3) Increasing access to financing for clean energy. USAID: Alliance for Mindanao Off-Grid Renewable Energy -------------- -------------- ¶4. The Alliance for Mindanao Off-Grid Renewable Energy (AMORE) is a seven-year project in cooperation with the Philippine Department of Energy, the Autonomous Region in Muslim Mindanao and private U.S. firm Sunpower Corporation. The primary contractor for AMORE is Winrock International, Inc. The program began October 2002 and will end September 2009. By end of 2009 AMORE will energize at least 400 remote and conflict affected rural communities in Western and Central Mindanao. The total project budget is $10.4 million. ¶5. AMORE encourages strong community participation in designing and operating solar and microhydo systems and with an objective to contribute to peace and development initiatives in Western and Central Mindanao by improving the quality of life in these communities. Activities build local technical and financial capacity to effectively collect user fees, maintain and expand renewable energy systems access in remote villages. USAID provides technical expertise and training for the installation, operation and maintenance of the systems. Sunpower Corporation and the Philippine Department of Energy have procured renewable energy equipment for the project. ¶6. Since 2002, AMORE has achieved the following results: (1) Provided electricity to more than 14,000 households in 400 remote rural villages using solar cells and micro-hydro power systems; (2) Installed more than 300 renewable energy powered street lights and illuminated more than 140 community centers; (3)Provided renewable energy systems to 116 schools, enabling them to access distance education services and audio visual materials; (4)Prevented the emission of over 6,100 tons of carbon dioxide; (5)Organized at least 400 community development associations that plan and manage the renewable energy systems in their communities; (6) Strengthened the capability of the communities to operate, maintain, and expand the renewable energy systems; (7) Established operation and maintenance accounts for communities to collect funds to cover operational expenses. ¶7. Abdulhil Alih, Chairman of the AMORE-established association in Pababag, Tawi-Tawi said that the lights, the training, and the other socioeconomic interventions that AMORE has extended to his community gave them a new sense of security. "The people here are not as easily convinced anymore to join the Abu Sayyaf (an Al Qaeda-linked network) or other renegade groups, because they can really see now how the lives of people here are progressing." USAID: Energy and Clean Air Project MANILA 00001283 002.2 OF 002 -------------- ¶8. The Energy and Clean Air Project (ECAP) was forged in response to two Philippine policy reforms: the Electric Power Industry Reform Act of 2001, and the Clean Air Act of 1999. USAID partners with the Philippine Department of Energy, the Department of Environment and Natural Resources, and local governments in the cities of Makati, Cebu, Davao, and Baguio to achieve two goals: (1) Implement policy reform initiatives designed to avert power crises (2) Support activities to reduce vehicle emissions. ECAP has a budget of $8.9 million over the period of October 2004 to September 2009. The primary contractor is PA Government Services, Inc. ¶9. ECAP promotes new investments in the electricity distribution system, encourages the use of cleaner and indigenous energy resources, and seeks to improve rate structures to reflect the true cost of power, production and distribution. In its clean air clean air activities, USAID supports the Department of Natural Resources, the Department of Transportation and Communication, and Department of Trade and Industry. ECAP oversees the establishment of efficient vehicle inspection and maintenance procedures and educates the public about how poor air quality can affect health. USAID: Sustainable Energy Development Project -------------- ¶10. The Sustainable Energy Development Project assists the Philippine Energy Regulatory Commission to become a more independent and credible regulatory agency. SEDP has two components: (1) technical support to the Energy Regulatory Commission in implementing power sector reforms; and the (2) Clean Cities Coalition Program, which promotes the use of clean, indigenous and alternative fuels in Makati, Marikina, Baguio, Iloilo, and Davao cities. SEDP's budget over a ten-year period (1999-2009) is $5.4 million. The project is operating under a Participating Agency Service Agreement between USAID and the U.S. Department of Energy. ¶11. As the electricity market reforms enter a critical and challenging phase with the commercial operation of the wholesale electricity spot market, USAID assists the Energy Regulatory Commission enhance its technical capability by training its staff; peer exchange programs between the Commission and its counterparts in the United States; and orientation seminars for newly appointed members of the Commission. These activities strengthen the role of the Commission in ensuring fair and level playing field within a competitive electricity market. USTDA Rural Electrification Projects -------------- ¶12. The Rural Electrification Distribution Improvement and Financing has given $404,510 worth of technical assistance to the Philippine Rural Electrification Financing Corporation to improve distribution systems and implement associated financing plans for rural electrification operations in the Philippines. The current project targets electrical system loss reductions through proper maintenance and loss control mechanisms, made possible through employing equipment, materials, and construction practices that meet international standards. USTDA financing plans will help the Rural Electrification Financing Corporation receive implementation financing approval. The National Rural Electric Cooperative Association International Ltd. of Arlington, Virginia is the sole-source contractor providing the technical assistance. ¶13. In 2003, USTDA provided $446,909 to the Rural Electrification Financing Corporation to partially fund technical assistance for forty electric cooperatives in the Philippines. The assistance identified electric power system infrastructure needs and generated loan documents for the cooperatives. The primary contractor, NRECA, provided technical assistance and contributed funds toward the project's completion. ¶14. Additional Philippine renewable/clean energy projects currently under consideration by USTDA for FY09/10 include: 1) GNPower Mariveles Pumped Storage Hydropower Project (600 MW); 2) First Gen Timbaban Run-of-River Hydroelectric Project (10-15MW); 3) NPC Island Electrification Through Renewable Energy - Hydropower (140 MW); and 4) Greenergy IGCC Waste-to-Energy Gasification Project for Morong Municipality ¶15. USTDA has approved funding for an ASEAN Clean Energy Conference which will be held early 2010 in a Southeast Asian country. Philippine government and private sector representatives will be invited to attend and USTDA will sponsor five of the Philippine government participants. KENNEY