MANILA, Philippines – The Philippines may avail itself of up to $1 billion in funds over the next five to 10 years for the development of renewable energy and energy efficiency projects.
Of the total amount, the first tranche amounting to $400 million will be channeled solely for the development of solar energy.
The $1-billion fund facility will come from the Climate Investment Fund (CIF), a global trust fund jointly administered by multilateral development banks consisting of the Asian Development Bank (ADB), the World Bank, the African Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank.
The CIF consists of two funds – the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF).
The CTF provides new, large-scale financial resources to invest in projects and programs in developing countries, which contribute to the demonstration, deployment and transfer of low-carbon technologies.
The SCF, on the other hand, serves as an over-arching fund for various programs to test innovative approaches to climate change. The first such program is the Pilot Program for Climate Resilience (PPCR).
ADB principal climate change specialist David S. McCauley said the loans for solar energy projects would be open to government, individual private power firms or through the government’s Public Private Partnerships (PPP) Program.
Solar power technology is more expensive compared to dirty fossil fuel at the initial stages of its development but becomes extremely cheap when fully operational particularly on large-scale operations.
“There must be a definite target scale for the solar energy projects to be economically viable,” McCauley said in a press briefing. He added that large scale solar power projects can produce excess energy, which in turn, may be sold to the National Power Corp. (Napocor).
A significant increase in the use of solar technology for power generation can reduce dependence on imported, expensive and “dirty” fossil fuel such as crude oil and coal. This reduces carbon emission, which has a direct correlation to the slowing down or reducing climate change.
The Philippines is not a major contributor to greenhouse gas emissions but is one of the countries that suffer the most from climate change and natural calamities. It is also among those with degraded forests. That, in turn, result in a reduction of potable water sources and contributes to increased cases of destructive floods.
But McCauley said the Philippines has expressed desire to turn its forest degradation around.
“There is a P1-million grant from the ADB that will help in the study towards saving the existing forest cover, and the reforestation of degraded ones,” the ADB specialist said, adding that Philippine forests have the potential of fully recovering from its poor state.
In Southeast Asia, experts forecast that each economy will experience a six to seven percent average reduction in its gross domestic product in the 21st century due to the negative impact of climate change.
A World Bank study, meanwhile, estimates that natural catastrophies will result in damages worth $185 billion.
“Climate change could then add $28-$68 billion more in damages each year from tropical cyclones alone,” the study noted.