Filipinos may pay for new loan but won't have say on how it's spent

THE Philippines may incur new debt but will have no say on how to spend it after the Department of Energy (DOE) admitted that it has no authority to decide on how to use money borrowed from a renewable energy fund.

The possibility was raised by various civil society groups including the Freedom from Debt Coalition and Philippine Working Group on the Asian Development Bank (ADB) in a statement issued last month.

The groups referred to a $101 million tranche under the Clean Technology Fund (CTF) that was supposed to go to a major solar generation initiative but went to the e-trikes project instead. The reallotment also supposedly skirted transparency measures, the groups said.

Money from the CTF will be lent to countries such as the Philippines to boost its renewable energy programs and projects.

A congressional probe is already being sought by the groups on the matter but so far, there are no takers.

"Let me check on that. It may have been approved by the appropriations committee," Senator Sergio Osmeña III, chairman of the Senate committee on energy, told Sun.Star.

Osmeña’s counterpart Batanes Representative Henedina Abad failed to answer text messages and calls. She is the wife of Budget Secretary Florencio Abad, who is known to be close to President Benigno Aquino III.

Besides the lack of transparency surrounding the fund's reallocation, the FDC is baffled about the basis for the move as it asked the DOE last November if there have been new financing terms for the loan.

"The decision on how to deploy the e-Trike financing is not within the Department's authority but under the Asian Development Bank. ADB's loan is developmental in nature and it will be allocated to projects which the private institutions are not too much inclined to invest in at the moment," Energy Undersecretary Loreta Ayson told the FDC in a December 7 letter.

It also said that the ADB has the right to fund projects which “they feel is much more economical and has greater impact and more transformational," she added. "It is the ADB's policy decision on how to utilize the funding and the question of its transparency rests with the ADB's better judgment."

But this statement is allegedly in contradiction with that of the ADB, which claimed that the e-trikes project is by the DOE and it is just lending support to the program.

In 2009, $125 million was allocated to the deployment of low carbon energy technologies as well as energy efficiency measures for industry, commercial buildings, and municipalities under the CTF, which aims to help developing countries like the Philippines combat climate change.

The Revised CTF Investment Plan for the Philippines last year, however, divided the amount to $24 million for energy efficiency and $101 million for e-trikes.

On top of the $101-million CTF loan, the ADB earlier said it will be providing an additional $300 million loan for the e-trikes program.

The DOE also said it has been directly coordinating with a variety of electric vehicles companies and manufacturing organizations in the country.

This was contradicted by the FDC secretary-general Milo Tanchuling, who said that "civil society groups, members of the academe who have been involved in this matter, electricity and battery providers, and local banks and micro-finance groups" have yet to be consulted about the issue.

100,000 e-trikes to be rolled out to reduce carbon emissions

Some 100,000 e-trikes are expected to be rolled out until the end of Aquino's term in 2016 with an initial rollout of 20,000 units in the first two to three years, the DOE had said.

In fact, the department encouraged interested local government units to provide inputs such as applicable regulations ordinances, incentives, and other policy mechanisms that will support the so-called “E-trike Rent-to-Own Program.”

In April last year, the DOE handed over 20 units of electric tricycles to the Mandaluyong City government. The commercial run of the e-trikes, with a seating capacity of six to eight passengers, started the following month.

After a trial period of four months, the department noted "exceptional economic returns" for the drivers in terms of fuel savings and higher net take home pay.

This is because the new e-trikes utilize lithium ion batteries, instead of heavier and environmentally-unfriendly lead acid batteries used in earlier e-trike models.

The weight of the lithium ion battery is approximately 40 kilos, compared against 140 kilos for lead acid batteries of equal capacity -- the equivalent weight of two adult passengers.

While the cost of lithium batteries is almost double that of lead acid batteries, their operational life is 15 times longer, the ADB earlier said.

As a result, e-trike owners will save approximately P200 a day in fuel costs. Petroleum-run trikes use five liters of fuel a day, at a cost of P230 against a daily bill of P30 to recharge the lithium batteries.

It was also seen as environment-friendly as e-trikes reportedly emit less than one-third of the carbon dioxide released by petroleum-powered tricycles.

The country aims to hike its dependence to renewable energy to 50 percent or equivalent to 15,400 megawatts by 2030. Renewables chalked up 26.3 percent of the power mix in 2010. (Sunnex)

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