DOE cancels $300-M e-trike loan with ADB

Published November 26, 2016, 10:01 PM  By Myrna M. Velasco

http://business.mb.com.ph/2016/11/26/doe-cancels-300-m-e-trike-loan-with-adb/

The Department of Energy (DOE) has formally cancelled the $300-million credit facility dangled by the Asian Development Bank (ADB) for the country’s electric tricycle (e-trike) rollout program.

However, the loan portion for the initial 3,000 e-trike fleets already awarded had been requested retained, according to Energy Secretary Alfonso G. Cusi.

“For the e-trike, I already cancelled the loan – supposedly the funding for 100,000 e-trikes. But for the 3,000 units, since bidding was done and units were already produced by the winning supplier, we’ll go ahead with that – so the canceled loan portion should just be for the 97,000 units,” he explained.

The energy chief said he specifically stated that in his letter to the ADB, but he has yet to get a formal reply from the bank.

“I informed them (ADB) in writing. I have not received any response yet,” Cusi said.

The envisaged nationwide deployment of e-trikes had been a flagship program of the Aquino administration – and part of the country’s bigger vision toward electric mobility.

But Cusi repeatedly indicated to media that the cost of the e-trikes had been expensive, and may turn out not viable enough both for the operators and penny-pinching drivers.

The energy department, under the past administration, had just been looking at a price point of R150,000 to R200,000 per e-trike, but unfortunately, the cost subsequently swelled to R250,000 per unit.

Under the terms of the ADB loan, the initial drawdown was programmed at $100 million — intended for the purported first phase rollout of 20,000 e-trikes. That should have been accomplished in 2015, but as can be gleaned now, the deployment of the fleets actually traversed extremely bumpy roads.

The higher end of the government’s target on e-vehicles’ rollout would have been at 100,000 units and this is seen accomplished until year 2020.

The ADB loan was approved in September, 2013, but it took time even to work on the bidding parameters for the e-trike providers – that alone was more than a year to complete.

The credit facility was from ADB’s “ordinary capital resources” in the amount of US$300 million, and can be “converted from time to time through a currency conversion;” in accordance with the terms agreed upon by the parties.

Realistically though, the entire electric vehicle paradigm for the country is still struggling on the policy formulation sphere – until now, there is no firm framework that underpins the program.