THE Asian Development Bank (ADB) and the national government are in the process of creating a $1-billion-worth long-term financing to fund public and private renewable-energy (RE) projects and programs.
In a roundtable discussion with reporters, ADB principal climate change specialist David S. McCauley said the long-term financing would be used for a period of 10 years for various RE projects.
McCauley said the first tranche would involve a $400-million fund allotted for public and private solar-energy development projects and programs. He said this would already be included in the Country Program Strategy of the bank with the government in the next three years.
“We’re putting together with the government what is expected to be a long-term billion-dollar program to promote renewable energy and energy efficiency. The first installment of that, if you will, will be this $400 million solar renewable-energy development and its in discussion now. I think the details will emerge next year, so I would expect that the overall program should be together by next year and the solar part of that will be ready by end of 2011,” McCauley told reporters on Wednesday.
McCauley explained that some $125 million of the $400-million solar-energy fund would come from Climate Investment Funds (CIF). The CIF is composed of two funds, Clean Technology Fund (CTF) and Strategic Climate Fund (SCF), that help developing countries pilot low-emission and climate-resilient development.
The country will receive CTF funding to cover part of the additional cost of solar-power generation through large-scale implementation of the net metering program under the Philippines’ Renewable Energy Act.
The program will reduce the time needed to have 30,000 solar-generation installations in commercial buildings from 10 to about two years. This will be done by reducing the initial capital cost with a single procurement through international bidding and providing additional tariff support above the regulatory feed-in tariff for the first three years.
The CIF are channeled through multilateral development banks, such as the ADB, the African Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, and World Bank Group.
“It will be a mix of public and private sector. The loans are a soft loan from the Climate Investment Fund that I mentioned, plus the normal ADB rates of lending. Some of the aspects of this will be to work with the private sector. The basic idea behind it is to try to get the solar industry within the country to the scale at which economies will kick in and the unit costs of the solar panels will come down and so that’s why we’re trying to do it in a fairly large investment, $400 million is a lot of money,” McCauley explained.
Earlier, the National Economic and Development Authority (Neda) said the ADB might extend a total of $2.3 billion in loans and grants to the Philippines in the next three years.
The amount of $2.319 billion is an indicative amount according to the Neda Public Investment Staff (PIS). This means that the amount can still change before the commitment of the ADB to finance mutually agreed projects and programs.
Based on data from the Neda PIS, for 2011 to 2013, the ADB may extend around $750 million worth of program loans and $1.569 billion worth of project loans. The Neda said around $812 million worth of assistance may be programmed for 2011; $777 million in 2012; and $730 million in 2013.
In terms of assistance for programs, the ADB may extend $300 million in 2011, $250 million in 2012, and $200 million in 2013. For projects, Neda data showed that ADB assistance may reach $512 million in 2011, $527 million in 2012 and $530 million in 2013.
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