By Alena Mae S. Flores Posted on Mar. 18, 2013 at 12:01am
The Energy Department’s first-come, first-served policy on renewable energy projects will favor the big players and put smaller companies at a disadvantage, an official from International Finance Corp. said over the weekend.
“This favors the big guys. Because… the others who really need FIT [feed-in tariff] and… don’t have strong balance sheets… would be somehow in a disadvantage,” IFC resident representative Jessie Ang told reporters.
The department will allocate the installation targets for hydro, wind, solar and biomass on a first-to-build basis.
The department approved an installation target of 250 megawatts for hydro, 250 MW for biomass, 200 MW for wind, 50 MW for solar and 10 MW for ocean technology.
If a developer becomes eligible for the installation target, it can avail of the feed- in tariff rates. The department pegged the power rates on run-of-the-river hydro at P5.90 per kilowatt-hour; biomass, P6.63 per kWh; wind, P8.53 per kWh; and solar, P9.68 per kWh.
“Some of these people are strong entity so they can do it on the balance sheet and the balance are strong enough so that if they’re not FIT-able, then they’d be carrying the risk of the big entity. So of course this favors the big guys,” Ang said.
He said IFC, the investment arm of the World Bank, would study how to help developers get financing under the new policy.
“You have to find a way to see if you can structure around it. Ideally, the best solution is okay, you’re eligible so no more question, you’ll build it it’s done. But the government has decided it would do something else, first come first served, so it comes with a certain characteristic because you’re going to put money out even if you don’t know if FIT is going to happen,” he said.
Ang said banks needed some assurance when to lend and that the new policy was something they must carefully consider.
“If I am just looking purely on a finance point of view, this tends to favor the big guys because if you put the money out and you don’t know if you have FIT, what assurance do you have?” he said.
Officials of the Philippine Association of Small Scale Hydropower Inc. earlier urged the government to address the funding concerns of renewable energy projects in the wake of the first-come, first-served policy.
“Developers are given a challenge to do that because we have just managed to convince local banks over the past few years that [the Renewable Energy Act] is now being implemented but this was something which the banks were caught surprise by,” said Knud Hedeager, Smith Bell Mini-Hydro Corp. chairman and PASSHydro director for special concerns. source
No comments:
Post a Comment