MULTILATERAL and bilateral institutions have urged the government to amend the Electric Power Industry Reform Act (Epira) to attract much-needed investment in the power and energy sectors, which are key to ensuring that the country’s power requirements will be met in the next few years.
In a press briefing at the Public-Private Partnerships (PPP) conference on Thursday, Fumio Hoshi, executive director of Japan Bank for International Cooperation (JBIC), said there was a noticeable decline in power- and energy-sector investments after the Epira was promulgated.
This, Hoshi said, has become responsible for the shortage of power and electricity in many parts of the Philippines and caused the suffering of many Filipinos. This also affected the country’s competitiveness as a viable investment destination, he said.
“I hope that the new administration will amend the Epira so that the investors, as well as the lenders, will be willing to invest [or] lend especially in these [power] projects. You probably noticed that there has not been any major investment in your country and that is due to the Epira, and I think you understand that it has to be amended. There is a lack of electricity in your country and people are suffering,” Hoshi said.
Hoshi said the amendment of the Epira should also be sought by multilaterals like the Asian Development Bank (ADB) and World Bank. He said an amended Epira will make more PPPs in the energy sector possible in the country.
Jesse Ang, resident representative of the International Finance Corp. (IFC), agreed with Hoshi, and said there was a “risk” involved in merchant power. He said the IFC and ADB worked together in the Masinloc project, a merchant-power project.
Ang also suspected that the previous administration “manipulated” electricity prices.
“I think the uptake of new power projects has been very slow since the Epira, although my personal view is that it’s because the previous government really manipulated the electricity prices and did not allow the free market to go. It’s only recently that the wholesale spot market, in my view, has reflected the true cost of power and so I think there is a lot more interest today than there has ever been in terms of new power,” Ang said.
Prior to this call by multilaterals and bilaterals, the local think tank IBON Foundation Inc. criticized the Epira, saying the law was responsible for the increase in power rates in the Philippines.
Before the Epira, IBON said the power sector was composed of generation, transmission and distribution sectors. The National Power Corp. generated electricity on its own and bought electricity from the Independent Power Producers, and transmitted this to distributors and large industrial customers through high-voltage wires. The distribution of electricity to end-consumers was done by privately owned electric utilities, a few government-owned utilities and electric cooperatives.
No comments:
Post a Comment