Impending ADB loan for Cebu power plant hit

MANILA, Philippines - A coalition yesterday expressed its “strongest opposition” to the looming approval of a loan from the Asian Development Bank (ADB) that would facilitate the construction of a 200-megawatt, coal-fired power plant in Cebu.

The Freedom from Debt Coalition (FDC), in partnership with several environmental lawyers in Cebu, scored the ADB’s likely authorization of the $120-million loan of Kepco Salcon Power Corp., which would put up the coal-fired power plant in Naga town.

“This impending ADB approval validates the financial institution’s horrible track record in funding the private sector’s past and ongoing projects that contribute to climate change,” the FDC said, adding that coal-fired power plants play a significant part in the deterioration of the environment.

The FDC urged the Department of Environment and Natural Resources to intervene and ensure the environmental protection of Cebuanos.

It also called on the Department of Energy to move away from its bias on coal and seriously implement the country’s renewable energy law.

“The project comes at a time when there is a strong push toward renewable energy in the country and the ADB’s recent adoption of its 2009 Energy Policy that ostensibly will help Asia and Pacific countries secure adequate energy supplies while cutting levels of greenhouse gas emissions,” it added.

A joint venture of Kepco Philippines Holdings and Salcon Power Corp., the Visayas Base Load Power Project involves the construction and operation of a 200-MW coal-fired power plant that is seen to provide additional base load to the Visayas power grid.

The FDC said the project is categorized under “Category A Projects,” with alleged significant adverse impact to the environment and requires submission of an environmental impact assessment (EIA) to the lending institution.

However, the FDC said the EIA and Initial Poverty and Social Assessment submitted to the ADB “glossed over health and environmental risks posed by the coal-fired power plants,” as no information was provided on any baseline data of studies undertaken.

The FDC said the mitigation plan does not include a health program to monitor coal ash-related diseases or any mention of the project’s impact on coastal communities and marine ecosystems.

Instead, the FDC said Kepco entered into a memorandum of agreement with the Cebu provincial government last July 3 to dump coal ash in a P100-million, 25-hectare property recently purchased by the province. The property is allegedly partly submerged in seawater.

Environmental lawyers under the Global Legal Action on Climate Change is questioning the deal due to alleged conflict of interest and violation of existing environmental laws.

The province expects to earn $1 for each ton of coal ash dumped. But environmentalists argued that this is just a token amount compared to the overall degradation that communities living near the power plant and the coal ash dump would suffer.

“The power industry is a major contributor to climate change with power plants utilizing fossil fuels such as coal contributing the highest amount of carbon dioxide emissions to the atmosphere,” the FDC said.

“The ADB must reject the Kepco Salcon Power Corp. loan,” it added.