PHILIPPINES CLIMATE CHANGE MITIGATION PROGRAM A Joint Program of the NET OF TM EN R E A R P G E Y D PH PILPINES Philippines Department of Energy US Agency for International Development TERMINAL REPORT Technical Assistance to DOE for Enhancing Private Sector Participation in New and Renewable Energy Investments for Off-Grid Rural Electrification (TASK 1 – Refranchising Study) Submitted to the: United States Agency for International Development (USAID) and the NET OF TM EN R E A R P G E Y D PH PILPINES Department of Energy Manila, Philippines By: GRACE S. YENEZA Prepared for: Prime Contractor - PA Consulting, Inc 3rd Floor, Department of Energy Building Energy Center, Merritt Road, Fort Bonifacio, Taguig Metro Manila, Philippines Phone: (632) 840-1401 to 21 loc 343; Fax: (632) 840-2184; E-Mail:
[email protected] This report was prepared under the terms and conditions of Contract No. 492-C-00-97-00063. The opinions expressed herein are those of the authors and do not necessarily reflect the views of the USAID. TERMINAL REPORT TASK #1- DEVELOPMENT OF STANDARD FRANCHISE WAIVER AGREEMENT AND EVALUATION OF RE-FRANCHISING I. BACKGROUND Energy is recognized as an important ingredient for alleviating the incidence of poverty in rural communities. Rural electrification is therefore a priority program of the Department of Energy and its attached agencies. A major challenge besetting the sector today is how to accelerate expansion of electricity to some 8,000 barangays still outside the reach of the grid. In the past, government has been directly subsidizing these expansion programs, however, with current budget deficits and rising costs of grid extension, the government is hard pressed to continue the same strategy as before.