UK fund, PE2 meet PPP Center for gov’t EE projects

  • UK fund, PE2 meet PPP Center for government Energy Efficiency projects
    From left: William Hudson of Carbon Trust/LCEP, Alexander Ablaza, president of PE2, and Mia Mary G. Sebastian, deputy executive director of PPP Center (Image: PE2)

QUEZON CITY, 6 September 2019 – A visiting mission of UK Prosperity Fund’s ASEAN Low Carbon Energy Programme (LCEP) and the Philippine Energy Efficiency Alliance (PE2) met earlier today with senior officials of the Public-Private Partnership Center (PPPC)  to explore collaborative opportunities to support private capital flows to public sector energy efficiency projects through public-private partnership (PPP) transactions.

The UK-LCEP delegation was represented by Josephine Orense of the British Embassy Manila, William Hudson of Carbon Trust, Thomas K. Dreessen, a seasoned international ESCO expert, and Laurie B. Navarro.

PE2 president Alexander Ablaza represented the non-profit alliance of energy efficiency market stakeholders.

Led its Deputy Executive Director, Mia Mary G. Sebastian, PPPC was also represented by Lea R. Odulio, Joanne B. Babon, Phebean Belle A. Ramos-Lacuna and Manuel Omedas Aldanondo.

Both LCEP and PE2 manifested their shared position of aspiring for more financial modalities that would enable off-balance sheet capital flows from the private sector toward energy efficiency projects in the public sector. Aside from direct procurement of energy service company (ESCO) performance contracts under the Government Procurement Reform Act and Joint Venture (JV) agreements between government and private entities, LCEP and PE2 promoted the use of PPP transactions to enable larger, bundled energy efficiency projects, such as street lighting and public building retrofits.

LCEP and PE2 emphasized that the B-O-T law, which enables PPP transactions, was cited in the recently passed Energy Efficiency and Conservation (EE&C) Act as one of the reference policies as legal basis for innovative financial modalities.

PE2 has a continuing conversation with LCEP for various barrier removal interventions in the EE&C market. PE2 was pleased to learn that LCEP was interested in removing persistent policy barriers that prevented ESCO performance contracting and public-private partnership (PPP) transactions for energy efficiency projects implemented in the public sector. In previous meetings, PE2 also suggested that LCEP study the possibility of enabling a guarantee facility which should cover not only customer credit risks, but more importantly, ESCO energy performance guarantee risks of small and medium-sized ESCOs. Such guarantee cover, among other financial market interventions, would improve access of ESCOs to debt and equity capital for pipeline performance contracts.

The UK Prosperity Fund through its Foreign and Commonwealth Office has awarded a 3-year program called the ASEAN Low Carbon Energy Programme (LCEP) to Ernst and Young with Carbon Trust, a UK consulting company as one of the LCEP delivery partners.

Carbon Trust informed PE2 that LCEP will provide policy support, capacity building and technical assistance to facilitate green finance flows and improve the regulatory, policy and practical conditions for energy efficiency measures in Southeast Asia. It will support five broad types of activity:

  1. Capacity building of government, institutions and business;
  2. Policy reform of energy frameworks and standards;
  3. Market development by strengthening connections between project developers and investors;
  4. Raising awareness of available technologies to increase the uptake of energy-efficient products and services; and,
  5. Partnership coordination and commercial ventures.

The Carbon Trust is leading the delivery of the energy efficiency component of the LCEP across five countries: Malaysia, Myanmar, the Philippines, Thailand, and Vietnam. The work will be carried out in two phases: the 6-month Inception Phase, focusing on market assessments, the design of the interventions and the overall strategy of the programme, and the subsequent multi-year Implementation Phase.

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Philippine Energy Efficiency Alliance Inc. (PE2), is a non-stock, non-profit organization of energy efficiency market stakeholders.

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R.A. 11285 - An Act Institutionalizing Energy Efficiency and Conservation, Enhancing the Efficient Use of Energy, and Granting Incentives to Energy Efficiency and Conservation Projects

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The Philippine Energy Efficiency Alliance, Inc. (PE2) is a non-stock, non-profit organization of energy efficiency market stakeholders.

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