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Climate Action Philippines/Aksyon Klima July 13, 2012 Trust Fund Committee Clean Technology Fund Climate Investment Funds Dear members of the CTF Trust Fund Committee: Aksyon Klima continues to call for the deferment, if not outright rejection, of the endorsement of the Philippines’ revised investment plan. Our network was included in the supposed steering committee organized to prepare for the stakeholder consultations on the revised investment plan. As we have already narrated to the Trust Fund Committee, this steering committee was unceremoniously swept aside, and the massive process deficit worsened when the Asian Development Bank pushed through with the consultations last May. We contend that the consultation outcomes were misrepresented, as there was in fact a strong consensus, if not an agreement, over the following key issues: The involvement of local government units in the project design would be disastrous, especially given the upcoming election year; There was insufficient reasoning behind the diversion of funds from the solar rooftop plan; Local transportation planning should have been considered first, and with it the addition of two- and four-wheel electric vehicles in the proposed intervention; and The 20,000-unit review threshold should be even lowered to rectify mistakes and prevent electric waste as much as possible. The Department of Energy itself has acknowledged “technical, financial, and social challenges” in the project design. Please refer to page 11 of the attached web clippings on the issue from local media, who have been closely scrutinizing this project due to perceived flaws in the approval process Energy secretary Rene Almendras has also publicly admitted that he “can even make the e-trike work using local funds” (page 16, see also page 13). If our government already admits to being able to launch the e-trikes project without the CTF loan, the funding could then be put into better use. One example would be investing it in community-based renewable energy systems, which have been successful in our country but which need to be replicated in more areas. Thank you for your consideration. Sincerely, Rowena F. Bolinas National Coordinator c/o NFR, Rm. 205 PhilDHRRA Partnership Center, 59 C. Salvador St. Varsity Hills Subdivision, Loyola Heights, 1108 Quezon City, Philippines TF +632 927 0122 | [email protected] | www.aksyonklima.com 1 http://www.bworldonline.com/content.php?section=Economy&title=E-trike-fund-stalled-over-issue-by- advocacy-groups&id=52388 FREE PREVIEW (BUSINESS WORLD) Posted on May 25, 2012 07:39:16 PM E-trike fund stalled over issue by advocacy groups ADDITIONAL SUPPORT for the Energy department’s electric tricycle (e-trike) project has yet to be approved by the committee administering the fund due to complaints from advocacy groups, an official of the Asian Development Bank (ADB) said. ### 2 http://news.manilastandardtoday.com/2012/06/13/govt-shifts-p21b-loans-to-e-trikes/ (or http://www.scribd.com/doc/96821376/Manila-Standard-Today-June-13-2012-Issue) Govt shifts P21b loans to e-Trikes Mindanao solar projects dropped also for e-appliances Posted June 13th, 2012 by Christine F. Herrera & filed under Feature. MANILA STANDARD TODAY MINDANAO continues to reel from a power shortage, but the Aquino administration has engaged in “fund diversion and railroading” of a solar power project worth $500 million (P21.5 billion) in foreign loans in favor of 100,000 energy efficient electric tricycles or e-Trikes and e-appliances that will be distributed in the 2013 mid-term elections. At P215,000 $5,000 each, some 20,000 8-seater e-Trikes and P1-billion worth of e-appliances such as television sets, electric fans, refrigerators, computers and air conditioning units will be distributed in Metro Manila starting next year and nationwide up to the 2016 presidential elections, according to the Energy Department. Civil society groups and a Mindanao lawmaker have protested and questioned the “fund diversion.” They want the project aborted until after a credible consultation has been held. President Benigno Aquino III himself approved the shift from the solar power generation project originally espoused by the Arroyo administration to the e-Trikes project even before proper consultation was made, according to Pete Maniego, board chairman of the National Renewable Energy Board, which was created as mandated by the Renewable Energy Act. 3 Maniego was part of the board when the solar power generation project under the Arroyo administration was approved by the Washington DC-based Trust Fund Committee, which oversees the Clean Technology Fund or CTF. “We question the haste with which this fund diversion was made without credible and transparent consultation from various stakeholders. Was the process railroaded to beef up the campaign kitty of the administration?” said Red Constantino, executive director of the Institute for Climate and Sustainable Cities. Constantino said the Aquino administration created an “artificial demand” for transportation to justify the purchase of e-Trikes. “Where does the e-Trikes foreign loan-funded project leave Mindanao, which is now experiencing a power crisis?” said Agham Rep. Angelo Palmones, who first accused some businessmen of conniving with Energy officials of creating “artificial power blackouts” to justify the privatization of the hydroelectric power plants in Mindanao. “Does Manila and elsewhere have a transportation crisis? These e-Trikes would compete in electricity use and further aggravate traffic congestion,” Constantino said the e-Trikes would aggravate the consumption of dirty coal and diesel because electricity in Metro Manila was basically relying on coal-fired and diesel power plants. “The government is also perpetrating political patronage since the e-trikes operation will be coursed through chosen local government units that would collect boundary payment of P350 daily from drivers and transmit this to the national government, which will service the debts to the Asian Development Bank,” Constantino said. The Energy Department says the loan contracts will come from the CTF, which will provide $101 million for the e-Trikes and $24 million for the e-appliances. The ADB will provide $300 million and the national government $99 million. The $1 million from the CTF will come as a grant for technology transfer from conventional battery to lithium-ion and rechargeable batteries. The foreign currency loans will be coursed through the Energy and Finance Departments at 6 percent interest, with the two departments re-lending the funds to local government units at 11 percent interest and payable in 25 years. The e-Trikes are said to last for 10 years, and they will be imported from China, Korea and Japan, the ADB says. “We were not consulted. Three days before the supposed consultation, the Renewable Energy Board, a government agency and recommendatory body attached to the Department of Energy, was told that the top level of government up to President Aquino himself already approved of the reallocation, so my attendance at the consultation was pro forma,” Maniego told the Manila Standard. 4 “The ADB provided an undisclosed number of participants only two working days to go over background documents,” Ronni Masayda, assistant transition manager of the NGO Forum on ADB, told the Manila Standard. “Such short notice for meetings, not to mention an extremely short period to study drafts, is unacceptable and puts to question the meaningful interaction of participants who would not have time to scrutinize the documents thoroughly.” Masayda expressed fears that the ADB was putting at risk the Philippine investment plan submission to the Clean Technology Fund by repeatedly and deliberately contravening the instructions of the CTF’s Trust Fund Committee to involve and undertake with civil society groups and other stakeholders a “common credible consultative process over the fund diversion.” Energy Undersecretary Loreta Ayson confirmed the “reallocation of funds” from the solar projects was based on both the lowered installed capacity targets for solar energy, and the increased investor interest in the development of solar energy. “The solar project planned by the ADB was a residential rooftop solar paneling project with a projected capacity of 100 megawatts. With the installed solar capacity targets currently pegged at only 50 megawatts, and the current applications with the Department for solar, we decided it would be inappropriate for the government to compete with private interests,” Ayson said. The Palace documents obtained by the Manila Standard show that the 100,000 e-trikes would cost $400 million but would “save” some 500,000 liters of gasoline a day or $500,000 a day for a total of $185 million in “savings” annually. The Energy Department said it would also avoid carbon dioxide emissions of 400,000 tons per year from a total emission of 160,000 tons a year. Citing an ADB study, the department said transport sector emissions accounted for 30 percent of the air pollution in the Philippines and about 80 percent of the air pollution in Metro Manila. Under the Philippines’ CTF Investment Plan, the government will purchase about 200,000 energy efficient air-conditioners, 150,000 refrigerators, 350,000 electric fans and 100,000 television sets. The consumers will pay for the appliances over a 36-month “hire-purchase scheme.” The documents also say the e-Trikes would be made available to areas with “stable power supply,” with the government providing “public charging stations.” “The project is not about procuring 100,000 e-Trikes but creating a new local industry and local employment,” the documents say. “So we have a case here of generating jobs for 100,000 drivers and displacing as many numbers of operators because the local government units would act as operators collecting boundaries and transmitting to the national government, which would ensure the debt servicing of the foreign loans,” said Palmones, who comes from Cotabato. 5 Denise Fontanilla, Aksyon Klima advocacy officer, said the ADB’s credibility became questionable having tried many times to “abbreviate a process” despite its own rules stipulating information disclosure and proper consultation guidelines.
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