WB, ADB endorse $250-million Clean Tech Fund

MANILA, Philippines - Multilateral creditors World Bank and Asian Development Bank have endorsed a $250-million fund to support the Philippines’ various initiatives to mitigate global climate change, a top energy official said.

Called Clean Technology Fund (CTF), the amount will leverage about $2.75 billion in investments, Energy Secretary Angelo Reyes said. 

The “$250 million co-financing is key to leveraging resources needed for GHG (green house gas) reduction and accelerating implementation of projects and programs,” Reyes said.

Reyes noted that donor countries, including Australia, France, Germany, Japan, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom and United States, pledged over $6.1 billion  in 2008 for CTF and Strategic Climate Fund. 

CTF is part of a broad global initiative to help developing countries meet the cost of actions needed to combat climate change.

The CTF, to be issued in concessional loans, will support the deployment of low carbon energy technologies as well as energy efficiency measures for industry, commercial buildings and municipalities. 

Activities supported by this fund will get co-financing from ADB’s regular operations, and this is expected to mobilize additional financing from both the state and private sectors.

The endorsed amount by the trust fund committee of the CTF is seen to develop a wide range of energy efficiency and renewable energy projects in the Philippines.  

Reyes said the CTF seeks to promote scaled-up financing for demonstration, deployment and transfer of low carbon programs and projects with a significant potential for long-term green house gas (GHGs) emissions savings.  

The energy chief said the CTF also promotes the realization of environmental and social co-benefits thus demonstrating the potential of low-carbon technologies to contribute to sustainable development and the achievement of the Millennium Development Goals (MDBs).  

Reyes said the fund includes programs in the power sector (renewable energy and highly efficient technologies to reduce carbon intensity), transport sector (efficiency and modal shifts), and in energy efficiency (buildings, industry and agriculture).

The Philippines, a leading country in the world in terms of renewable energy (RE), uses RE applications in 43 percent of total primary energy supply.

However, the country still has one of the lowest per capita electricity consumptions in the East Asia region.  

Reyes said, the funding which amounts to $250 million, would aid the country in combating the rising greenhouse gas emissions (GHGs) due to various developmental issues stemming from increased vehicle ownership, rapid urbanization rate, and land use change.

The CTF co-financing scheme is needed to support government efforts in transforming the energy sector through scaled–up distributed generation with RE resources and energy efficiency through demand side management. Demand side management will be able to keep electricity prices competitive by lowering peak demand, and reduced use of power will reduce the fossil fuel use for power generation.

The $250 million will become part of the Philippine CTF Country Investment Plan, which  is a business plan developed by the government in agreement with the ADB and the World Bank Group.  

The investment plan builds on the Medium-Term Philippine Development Plan (2004-2010), the Philippine Energy Plan (2008-2030), the National Environmentally Sustainable Transport Strategy, and other relevant sector plans. The plan will identify priority sectors for GHG emission reduction. Furthermore, the plan is supportive of the government’s poverty alleviation efforts.

Three broad areas are looked into for GHG emission reduction: supply and demand side efficiency, including grid optimization and initial investments in smart grid technology, as well as urban energy efficiency, renewable energy, including biomass and solid wastes, geothermal, hydropower, solar, and wind, and transport systems, bus rapid transit, advanced vehicle technology, urban rail, motor vehicle inspection and emission systems, and wider use of biofuels.