The Aquino administration on Wednesday said it will avail of a $300-million loan from the Asian Development Bank to buy energy-efficient tricycles or e-trikes, but said that amount was separate from a $500-million standby fund made available by the bank for solar projects.
Presidential spokesman Edwin Lacierda denied that the money had been diverted from solar projects.
“Let me be clear, the government is not availing of any loan for solar projects. It is a standby loan by the ADB to whoever would wish to avail or explore solar power as an alternative source of energy,” Lacierda said.
“There is, however, a loan that we’re availing of. We are planning to (use) a loan of around $300 million for e-trikes. It is separate and distinct from the loan that ADB is providing for private proponents of solar energy.”
Agham Rep. Angelo Palmones earlier protested the supposed realignment of the $500-million loan facility for solar energy projects in favor of procuring 100,000 e-trikes for 2013.
The administration said the e-trike project was important because the Philippines spent $8.78 billion on imported oil in 2010, 66 percent of which was used by the transport sector.
Palace documents, copies of which were obtained by the Manila Standard, showed that the administration revised its Clean Technology Fund Country Investment Plan and presented it to the CTF Trust Fund Committee in Washington DC on November 4, 2011, and updated it in December 2011.
A number of non-government organizations have complained, however, that the Washington meetings were without the benefit of “credible, transparent and meaningful consultations” with civil society groups, the renewable energy sector and other affected stakeholders.
ADB Country Director Neeraj Jain denied the charge, saying more than 150 people were consulted over the three days of meetings, indicating that civil society groups had made their voices heard.
But Red Constantino, executive director of the Institute for Climate and Sustainable Cities, said the participants were invited to the consultations only two days before they were set in May.
“Some speakers were invited a day before or an hour before,” he said.
Ronni Masayda of the NGO Forum added that the principal energy specialist and his team repeatedly ignored requests for a draft or paper that would form the basis for consultations with civil society groups.
“The ADB has attempted to short cut, even short-circuit, the process,” Masayda said.
“In its desire to rush the consultations, the ADB employed deception and deliberately misused the name and logo of some members of the steering committee in order to create the impression that sessions were co-organized with civil society groups,” Constantino said.
While bank officials later apologized, the damage had already been done, he said.
While Finance Secretary Cesar Purisima and Energy Secretary Jose Rene Almendras were in Washington DC to present the revised investment plan, Energy Undersecretary Loreta Ayson told the Freedom from Debt Coalition that the ADB would provide $300 million in loans at 6 percent interest, with a grace period of five years and payable in 25 years.
With the ADB’s $300 million, the Clean Technology Fund would provide $101 million and the Philippine government some $99 million or a total of $500 million, of which $400 million had been allocated for e-trikes.
“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. There are already a lot of people who are willing to invest into solar [energy] as evidenced by the overwhelming push for the said technology. ADB decided to put their funds into more trail-blazing initiatives,” Ayson had said.
In a presentation, Purisima and Almendras said the government did not want to “crowd out” and “compete” with the private sector, which had a potential investment of 800 megawatts in solar projects.
They said the government strategy had evolved to increase investment in end-use energy efficiency.
“As a net importer of energy, the shift in priority for CTF funding will improve energy security caused by rising global concern over heightened competition for depleting energy resources and greater price volatility,” the two officials said.
“This is an important project for the Philippines. It will reduce pollution, create jobs, and boost the incomes of trike drivers,” Jain said in a letter to the Manila Standard.
But Purisima and Almendras also said that the net metering project using distributed solar power proposed in the original Country Investment Plan was not yet ready for implementation, and that given private interest, it was “not obvious that concessional finance is needed in the near term for the net metering program [or for other utility-scale solar power projects.]”
“The GoP [government of the Philippines] believes that concessional financing could be better utilized in the near term to begin converting the public vehicle fleet to electric vehicles,” the two officials said.
They said additional potential from solar and waste-to-energy was high, but the commercial development of those resources had very high start-up costs, and that they were not expected to contribute at the gigawatt scale in the foreseeable future.
“Therefore, investments in more efficient appliances and energy-efficient transport systems are critical in the near to medium term,” Purisima and Almendras said.
Some 20,000 of the 100,000 units of e-trikes will be rolled out and distributed in Metro Manila in 2013, and the rest will be distributed nationwide up to 2016.
But Constantino questioned the involvement of local government units in generating jobs and collecting from the tricycle drivers would promote political patronage.
Palmones agreed.
“We could expect that since it would be the LGUs that would choose who would be hired as drivers, then what could stop the local executives from changing the drivers once every two or three months just so the government’s job employment statistics would show how many people were given jobs when the truth is there was only a handful of jobs held by many drivers?” Palmones said.
Palmones said if the government was really trying to address the high cost of petroleum products, then it would be best that the funds be reallocated to bicycles with the government providing bike lanes.
Constantino said the government was creating an artificial demand that was not based on the market but on LGU sign-ups.
He also said the government was crowding out the private sector, which would be more efficient in collecting from the tricycle drivers.
“Who benefits most from this e-trikes project? Only the ADB gets it easy. By involving the LGUs, the ADB is assured that the LandBank could automatically withhold the payment from the LGU’s internal revenue allotment,” Constantino said.
Constantino added that the haste with which the program was being rolled out a year ahead of the elections in 2013 created suspicions that it was being used to beef up the administration’s election kitty.
Palace documents obtained by the Manila Standard show that the 100,000 e-trikes would cost $400 million but would “save” some 500,000 liters of gasoline a day or $500,000 a day for a total of $185 million in savings annually.
The Energy Department said it would also avoid carbon dioxide emissions of 400,000 tons per year from a total emission of 160,000 tons a year.
Citing an ADB study, the Energy Department said transport sector emissions accounted for 30 percent of air pollution in the Philippines and about 80 percent of air pollution in Metro Manila.
Under the Philippines’ CTF Investment Plan, the government will purchase about 200,000 energy efficient air-conditioners, 150,000 refrigerators, 350,000 electric fans and 100,000 television sets.
Consumers will pay for the appliances over a 36-month “hire-purchase scheme.”
The document also said the e-trikes would be made available to areas with “stable power supply” with the government providing “public charging stations.”
“The project is not about procuring 100,000 e-trikes but creating a new local industry and local employment,” the document said.
Opposition lawmakers on Wednesday questioned what they said was the administration’s shift from promoting solar power to the e-trike project and called for a congressional investigation.
“The e-trike and e-appliances will benefit only a handful and may possibly be used for vote-getting in the 2013 elections,” said Zambales Rep. Milagros Magsaysay, a member of the House committee on energy.
“It would have been better if the administration used it for the solar project as it will benefit more people.”
Pete Maniego, chairman of the National Renewable Energy Board, said President Benigno Aquino III had approved the shift from the solar power project originally espoused by the Arroyo administration to the e-trikes project even before proper consultation was made.
Siquijor Rep. Orlando Fua, an opposition lawmaker, said he would file a resolution to investigate the shift.
But administration ally Senator Serge Osmeña said it was within the government’s discretion where it chose to spend the energy loan.
