RURAL POWER PROJECT SOLAR PV SUBCOMPONENT Gabriel S. ZamudioPV Manager, RPP-PMO
Barangay Electrification Situationer(As of 31 May 2006) LUZON 19,884 --------- = 97.11% 20,476 PHILIPPINES 39,445 --------- = 94.04% 41,945 592Unelectrified Barangays 41,945 Potential Barangays Based on 2000 NCSO VISAYAS 10,926 --------- = 95.48% 11,443 517Unelectrified Barangays 2,500Unelectrified Barangays MINDANAO 8,635 --------- = 86.13% 10,026 1,391Unelectrified Barangays Solar PV Systems will be used for most of these barangays.
Rural Power Project • Goal • Support the implementation of reforms and priority investments in rural power sector. • Objectives • To achieve increased access to electricity services. • To support transformation of ECs into more viable and competitive commercial entities. • Increase use of renewable energy.
Solar PV Subcomponent: Overview • Involves the commercial dissemination of PV systems for single homes, establishments and community applications thru PCs and MFIs; • Provision of GEF grants and government subsidies to develop the market and buy-down cost of PV systems; • Line of credit at DBP and PCFC will be made available for MFIs retail lending operation to finance HHs acquisition of solar PV systems; • Provision of TA and market development support.
DOE Accredited Companies “DOE is still looking for more companies and other distribution channels.”
Participating MFIs • TAYTAY SA KAUSWAGAN INC. (TSKI) • Cooperative Bank of Palawan (CBP) • Center for Agriculture and Rural Development (CARD) • Negros Women for Tomorrow’s Foundation • People’s Bank of CARAGA • Progressive Bank • Green Bank TSKI is a PIONEER in the Solar PV Lending Program with at least 1,000 systems or households financed thus far.
Output-Based Grants/Subsidies for PV • GEF Financial Incentives • 10 – 50 Wp systems = US $2.50 per Wp • > 50 – up to 100 Wp = US $1.50 per Wp • Community Systems = US$1.50 per Wp up to $450 • Government Subsidy • 20 – 30 Wp systems = Php 8,000 per system • >30 - 50 Wp systems = Php 4,000 per system
WHY SOLAR PV? • Least cost solution to basic electricity services for most households remote from the grid • For lighting, communications and other household/ community needs Schematic of SHS
What Does the Family Get? • A cleaner source of energy and more of it • A 20 Wp system generates electricity for: • 2 light bulbs • Operates the transistor radio • Charges the mobile phone • Kids have much more time for homework • An improvement in general health indicators
Example of PV System Debt Servicing
Financing PV Systems: Business Model LGF Buy-back Agreement Vendor Insurance Policy MFI Sale/Warranty Agreement Funding Agreement Household/ Rural Business Lease-to-Own Contract DBP
SSMP Approach • Clustering of barangays into viable packages • Baseload from community facilities (ex. barangay halls, health facilities, schools, public lighting) • Subsidies to improve affordability using the RPP Program • Focus on after-sales service & continued marketing • Competitive selection of SSMP Operator
Project ACCESS: Pilot SSMP • Mirant Foundation Philippines will finance contract cost for 55 barangays • Aklan, Masbate, Northern Samar and Palawan • ILPI – 2 barangays in Iligan City • AMORE – 21 barangays in Zamboanga del Sur and Zamboanga del Norte
TSKI is DOE and Mirant’s partner for the Project ACCESS 6 AUGUST 2006
Obligations of Contractors • Supply and installation.Supply and install PV systems in public facilities; • Maintenance.Provide maintenance services for at least five (5) years • Marketing.Commercially market, sell and install PV systems in minimum number of HHs within a stipulated period (e.g., 30 systems or 25% of barangay HHs, whichever is larger, within 12 months) To ensure contractor’s compliance in the Contract, there will be a tough performance bond requirement – 45% of the contract value
Market Development Support Facility (MDSF) • Cost-shared grants, max 50%, to support specific activities such as training and TAs: • Financial management, contract management, accounting and auditing; • Marketing (surveys, promotion, small demonstrations) and business development; • Market entry cost; • Eligible beneficiary is entitled for an annual allocation of Php500,000.00. • MFIs with existing partnership with accredited PCs can access the facility
MDSF Grant Availment Procedure Start • MDSF Proposal Form • PV Company must be accredited by DOE (MOA) • MFI must have MOU with at least one PCs PC/MFI submits proposal to DOE-PMO DOE-PMO evaluates proposals • Form is available at RPP website (www.doe.gov.ph ) • For the 1st applications of eligible organization WB “No Objection” DOE-PMO and PC/MFI sign MOA • First payment – 50% • Last payment – after liquidation Release of first payment
Loan Guarantee Fund • US$ 1.0 million guarantee fund to partially cover loan losses incurred in the provision of loan to RET purchasers and suppliers • Portfolio type guarantee for lending operation by MFIs
For further information:RPP-PMOTel No. (02)840-2252www.rpp.com.ph THANK YOU!