Philippine Sustainable Energy Finance Programme
Policy measure

According to the Climate Investment Funds (CIFs) (2011), “the Philippine Sustainable Energy Finance Program will comprise both an Investment and Advisory component to support the scaling up of EE/RE projects in the Philippine’s large corporate, SME, commercial, residential, municipal and microfinance sectors. The Program is designed to complement the sustainable energy finance work done by (International Finance Cooperation (IFC) in the Philippines with direct funding (2008-2009) and with Global Environmental Facility (GEF) funding (2009 – 2012).”


The proposed Programme will complement the ongoing Sustainable Energy Finance (SEF) programmes in the market and thereby enhance the local absorptive capacity, by (CIF, 2011):

  • “Accelerating the uptake of EE financing through targeted advisory services to FIs to deepen their understanding of the SE market.

  • Expanding support from EE sub project financing to RE subproject financing.

  • Reaching deeper going deeper into the market by partnering with the second-tier banks.”

“The Program will address existing market barriers through both advisory services and investment as a means to catalyze market transformation. The Program seeks to contribute to market transformation by building the capacity of financial institutions, and providing appropriate financial products, thereby fostering mobilization of private financial investment in sustainable energy projects while simultaneously increasing demand through end-user knowledge management and support; all of which should result in reduced GHG emissions, improved energy security and economic development in the Philippines.” (CIF, 2011)


The Programme represents a step up in market development activities by providing advisory services to selected service and technology providers and conducts market awareness activities to promote the development and implementation of energy efficiency projects in the industry as well as other sectors. (CIF, 2011) 


The following industrial sectors have been identified as having high potential in implementing EE projects: cement, semi-conductors, electronics, food and processed meat/seafood, beverage, ceramics, pharmaceuticals, personal care products, agro-industries, and pulp and paper, distribution utilities (CIF, 2011).

Implementation

“The Program’s Advisory Services Component will help advance the investment component by supporting market development activities (promoting knowledge and technical expertise on the end user side), and capacity building for participating FIs. Lessons learned and experience of sustainable energy financing will be shared across the relevant stakeholders particularly the local financial sector, as well as with other countries in East Asia. [The measures available for the Advisory Services Component include]:

  • Capacity building for financial institutions to build profitable portfolios of sustainable energy projects. This will comprise training on energy efficiency and renewable finance techniques; technical and financial evaluation; risk identification, allocation, and mitigation; credit analysis; marketing; support with financial product development, and portfolio reporting.
  • Conduct of sector studies that would help FIs identify relevant target segments, and guidance in marketing efforts to relevant end-users.
  • Support end-users and project developers to undertake energy audits, feasibility studies, and evaluate different alternatives.
  • Support awareness raising, dissemination of information and lessons through conferences, seminars and workshops, as well as media promotional campaigns. Business associations will be also involved.
[The Programme’s Investment Component] will offer the following products: (i) Risk Sharing Facilities to two to three commercial private banks to address the barriers mentioned earlier and catalyze uptake and scale-up of EE/RE projects in the Philippines, and/or (ii) Line of Credit to support to 1-2 commercial private banks for on-lending to EE/RE projects.” (CIF, 2011)
Challenges
No identified challenges.
Outcomes

It is estimated that the annual energy savings will be 63,000 MWh – 77,000 MWh. Considering a 15 year project life, the total greenhouse gas (GHG) reduction potential is expected to be 4.5 – 6.0 million CO2e or approximately 0.3 – 0.4 million t CO2e/year.

References

CIF (Climate Investment Funds), 2011.  CTF Private Sector Proposal. Available at: www.climateinvestmentfunds.org/cifnet/sites/default/files/Philippines%20Sustainable%20Energy%20Finance%20Program%20-%20Approved.pdf.