Fund earmarked for energy projects
SINGAPORE—The Philippine government is negotiating with the Asian Development Bank to secure a $1-billion loan with which to fund key renewable energy and energy efficiency projects in the country.
Already, the Manila-based lender is in talks with the departments of energy and finance for the terms and design of the proposed loan, Samuel Tumiwa, principal planning and coordination specialist at ADB, said at the sidelines of the Clean Energy Expo Asia 2010.
Tumiwa explained that the ADB loan would carry an annual interest of 1.2 percent to be spread over 28 years, with an eight-year grace period.
The Philippine government prefers longer tenor for the loans it takes out. By spreading debt maturities, the projects to be funded will become more financially feasible for investors.
According to Tumiwa, ADB expects the loan to be approved by the middle of next year.
Once approved, the amount—which would be rolled out in three to four years—would add to the existing $250 million in concessional loans the Philippines earlier received through the Clean Technology Fund (CTF).
These ADB loans, amounting to $1.25 billion, will help ease the problem of the government in funding key projects that will significantly reduce greenhouse gas emissions.
The government estimates it will need $2.75 billion in investments to implement these vital programs.
On the energy efficiency side, the ADB said it would want to focus efforts on reducing air-conditioning use in public offices and malls, among others.
Sohail Hasnie, principal energy specialist at the ADB, earlier said the Philippines was an ideal country to heavily invest in since it was leading the region on the renewable energy and energy efficiency front.
“I think, in the Philippines, you have all the necessary parameters for promoting renewable energy,” Hasnie had said.
Also, it will be ideal for the country to shift to renewable energy sources since the Philippines has a lot of renewable energy available and a very good regulatory framework in place, he added.
Currently, the Philippines is ahead of most other countries in the use of renewable energy sources. About 43 percent of its total primary energy supply comes from such sources, even though the country has one of the lowest per capita electricity consumption in East Asia.
Already, the Manila-based lender is in talks with the departments of energy and finance for the terms and design of the proposed loan, Samuel Tumiwa, principal planning and coordination specialist at ADB, said at the sidelines of the Clean Energy Expo Asia 2010.
Tumiwa explained that the ADB loan would carry an annual interest of 1.2 percent to be spread over 28 years, with an eight-year grace period.
The Philippine government prefers longer tenor for the loans it takes out. By spreading debt maturities, the projects to be funded will become more financially feasible for investors.
According to Tumiwa, ADB expects the loan to be approved by the middle of next year.
Once approved, the amount—which would be rolled out in three to four years—would add to the existing $250 million in concessional loans the Philippines earlier received through the Clean Technology Fund (CTF).
These ADB loans, amounting to $1.25 billion, will help ease the problem of the government in funding key projects that will significantly reduce greenhouse gas emissions.
The government estimates it will need $2.75 billion in investments to implement these vital programs.
On the energy efficiency side, the ADB said it would want to focus efforts on reducing air-conditioning use in public offices and malls, among others.
Sohail Hasnie, principal energy specialist at the ADB, earlier said the Philippines was an ideal country to heavily invest in since it was leading the region on the renewable energy and energy efficiency front.
“I think, in the Philippines, you have all the necessary parameters for promoting renewable energy,” Hasnie had said.
Also, it will be ideal for the country to shift to renewable energy sources since the Philippines has a lot of renewable energy available and a very good regulatory framework in place, he added.
Currently, the Philippines is ahead of most other countries in the use of renewable energy sources. About 43 percent of its total primary energy supply comes from such sources, even though the country has one of the lowest per capita electricity consumption in East Asia.
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