You are on page 1of 24

Empowering Africas Future: Building Infrastructure

& Agribusiness through Public-Private Partnerships


NRECA Headquarters, Arlington, Virginia

THE PHILIPPINE
RURAL ELECTRIFICATION PROGRAM
EXPERIENCE
Edita S. Bueno
National Electrification Administration
Republic of the Philippines
7 October 2014 Energizing the countryside
Electrifying the future
1
Flow of Presentation
The Philippines Facts & Figures

Status of Philippine Electrification Program

Challenges in the Implementation

Key Elements of Success

Impact of the Program

Positive Results
2
Facts & Figures


A country in Southeast Asia bounded by the
West Philippine Sea, Luzon Strait in the
north where also lies Taiwan, Pacific Ocean
in the east and the Celebes Sea in the south
West
separating from Borneo and Malaysia.
Philippine
Sea

An archipelago with 7,107 islands under 3
main geographical divisions, Luzon,
Visayas and Mindanao. Total land area is
300,000 square kilometers

Total population of 100 million (7th in Asia
& 12th in the world) divided into 7 major
ethnic groups: Tagalog, Cebuano, Ilocano,
Bisaya, Ilongo, Bicolano and Waray.
Population density is 333/square
kilometers
3 n e a
STATUS OF PHILIPPINE ELECTRIFICATION PROGRAM
As of June 1969 ELECTRIC DISTRIBUTION ELECTRIC DISTRIBUTION
STATUS OF ELECTRIFICATION
UTILITIES (EDUs) UTILITIES
PROGRAM As of August 2014
Connections
LUZON - 8 Municipalities/Cities 100%
Potential 6.210 M 119 ECs
Served VISAYAS - 4 Villages 99.97%
1.217 M MINDANAO - 4 24 PIOUs/ LGUs Sub-Villages 86%
Energized 19.60% TOTAL 16 Connections 85%

Source:
EA Annual Report 1968-1969
4
Electrification Profile
Divisions Potential Served %
Municipalities 1,490 1,490 100
Cities 144 144 100
Villages 42,028 42,014 99.97
Sub-Villages 103,489 88,653 86
Consumers 20,018,639 17,026,392 85
Implemented by 119 electric cooperatives, 16 private investor-owned electric
utilities & 8 local government managed electric utilities.
Seventeen million consumers or approximately 85 Million of the 100 Million
total population are with electric service; 54% of which are urban dwellers while
46% are from the countryside.
The major islands are connected through high voltage submarine cables.
Smaller islands do have independent or complementary systems.
5 n e a
Philippine Electricity Sector

Prior to 2001 2001 to present

Owned & operated by 28


Owned & operated
Generation & major independent power
solely by the Generation producers; 27 small power
Transmission national government
utilities remained under the
national government

Under the 119 electric Operated by a private


cooperatives, 16 private Transmission
concessionaire
Distribution Investor-owned &
8 local government
managed utilities Under the 119 electric
cooperatives, 16 private investor-
Distribution owned & 8 local government
managed utilities
6 n e a
Challenges in the implementation during the Early Years
Challenges Strategies
Archipelagic characteristic of Implementation mechanism such as island
the Philippines grid, submarine cable connection, mini-
grid/small power utility operation approach
Political leaders not convinced All out support of the President.
that the program will succeed Congressional approval of the program &
creation of NEA as the central supervising
agency. Strategic implementation of the
program
Issues on usage of electricity Basic information on electricity and its usage
Do the rural people know how through community leaders
to use electricity? 7 n e a
Challenges in the implementation during the Early Years
Challenges Strategies
Source of funds Government provided the initial needed
capital; loans were made available by
foreign governments and international
financial institutions
Vehicle for Electric Cooperatives patterned from the
implementation US model of NRECA and under the
supervision & control of NEA
Capability to implement Strong leadership & credible program
the program implementors; capability building of NEA &
EC staff through the assistance of foreign &
local experts 8 n e a
Challenges in the implementation during the Early Years
Challenges Strategies
Non-interest of private Area coverage of ECs was expanded to
electric owned systems to include proximate areas served by small
extend lines to rural areas utilities
Viability to implement Government extended concessional loans
& subsidies to the ECs. The ECs were
shielded from foreign exchange losses
Affordability Issue Rates are on a cash basis and have no
provision for margins; generation on the
off-grid areas are subsidized
9 n e a
Key Elements of Success

1. Strong Political Will

Electrification Champion/Advocate

Participation of leaders, people organizations & support


groups

People participation before & during construction stage

Bottom-up type of implementation (participatory)

10 n e a
Key Elements of Success

2. Appropriate Laws

Total electrification of the countryside as a state policy
objective. Creation of NEA to oversee program
implementation; provide technical and institutional
services as well as financing through soft loans


Sufficient powers and authority to implement program
considering political, financial and social consequences


Recognition of Electric Cooperatives as the Vehicle to
implement the program and provide the necessary legal
and organizational cover
11 n e a
Core Competencies of NEA

FINANCIAL INSTITUTIONAL TECHNICAL SUPERVISORY

12
Key Elements of Success
3. Clear Policy Framework

Rural Electrification is considered as an infrastructure like roads &
bridges, that every kilometer of line extended supports economic
opportunities

The Electric Cooperative Model has been chosen as the alternative to
local government management

Loans shall be in soft terms with long repayment period; borrowed in
dollars and lent in peso to ensure low/affordable rates; the whole
distribution system shall serve as collateral to their loans

Subsidies for capital expenditures for non-viable areas shall continue to
be provided to ensure total electrification
13 n e a
Key Elements of Success
4. Partnership with International Agencies

Total foreign loans contracted - $524.68M Partnership with NRECA, USAID, World Bank,
USA, Germany, Japan, France, UK, Canada, China, JICA, KEPCO, ADB for technical capacity
OPEC, ADB, World Bank, Chase Manhattan building, cooperative organization &

Loan terms: management, governance & leadership,


Payable from 12 to 30 years; Interest 2% -7.73% accounting and computerization program
Grace Period 5 to 10 years
Loan Packages Capacity Building
In 1964, a team from the USAID & NRECA In 1972, Stanley Engineering Consultants
conducted the Philippine Survey for the rural worked with NEA to design, review &
electrification program. The preparation of
evaluate construction work of local
feasibility studies and selection of priority
projects were determined as a major necessity.
contractors and development of an overseas
Another team from USAID & NRECA was sent to material procurement plan
supervise implementation of the pilot projects. International & Local
Details of Experts Engineering
14 Services
Total Investment in Electrification by the Government

Particulars Amount (in US Dollar)


Total Investment 1,377.05 million
Loans 911.05 million
Foreign 524.68 million
Local Counterpart 386.37 million
Subsidy 466.00 million
Average Investment/Consumer 131.67

15 n e a
Average Growth for the Past 10 Years
2004 to 2013

Average
Average Annual
Indicators Annual Growth 2013 Total
Increase
Rate (%)
Revenue (PhP) 187 M 21.29* 2,748.55 M
Sales (MWh) 389,495 3.74 14,318,934
Connections 388,407 6.20 10,152,834
* Increased Generation Cost

16 n e a
Averages
Operation of Electric Cooperatives
PERFORMANCE INDICATORS PHILIPPINES
Revenue/EC/Month (000) US$ 2,092 PhP 92,068
Unbundled Residential Rate (Php/KWH)
Mainland US$ 0.2233 9.8260
Island US $ 0.2538 11.1673
Connection/EC 87,888
Mainland 102,470
Island 35,728
Kms of Line Constructed / EC 1,527
Connection/Km of Line 32
MWH Sales /EC/Month 10,338
Monthly KWH Consumption/ Consumer 116
Monthly KWH Consumption/ Residential Consumer 64
System Loss (%) 12.28
No. of Employee/EC 190
17 n e a
Key Elements of Success
5. Partnership with the Local Private Sector

Public funds cannot always be sufficient, thus the private sector,
particularly, the generating companies, have been tapped to support
village electrification. In areas where they are hosted, they provide
the surrounding villages/communities with electricity. These are
normally marginalized communities. For every KWh, of one
centavo was allocated for missionary electrification.


This strengthened corporate social responsibility within the business
sector. This provided for an acceptable, harmonious, peaceful &
economic existence for the business. The communities which have
been helped provide assistance, security & to an extent, result to win
their loyalty.
18 n e a
Key Elements of Success
6. Strategic Program Implementation

It was necessary to have an immediate program impact, thus the
backbone approach of construction was utilized to connect town to town
and cover the major centers. This was the physical strategy. People
have to see to believe. Additionally, loan signing, pole erection &
energization ceremonies were celebrated to keep the excitement &
interest of people alive.

Prioritization of connections was determined according to geographical
locations, including economic indicators & proximity to tapping point.
Leaders (elected, community & opinion) were tapped for participation &
support to program execution, such as right-of-way acquisition, labor &
manpower, information/education programs, among others.

The electric cooperatives were called for semi-annual & annual
consultations on new policies, directions and plans.
19 n e a
Key Elements of Success

7. Public-Private Partnership

NEA & the ECs fall under this partnership category where
government provides the political & financial support while the ECs
serve as its implementing arm. In the process, government fulfills
its mandate of providing its citizens with access to electric service
while the ECs serve as conduit to the economic uplift of the rural
areas. Such partnership ensures a high level of success.

20 n e a
Key Elements of Success

8. Congressional & Executive Initiatives


The plight of the marginalized communities continues to be a major
concern of the national government considering non-access of smaller
islands to reliable electric service.

Thus government has provided annual appropriations to cover capital


expenditures for connection to households such as distribution system,
kilowatt-hour meter, service drop wire and housewiring installation costs
or equivalent to US$265.00 per household connection.

21 n e a
Impact of Rural Electrification

Economic boom of small & medium enterprises

More employment opportunities outside urban areas

Better educational system & facilities

Enhanced medical services including accessibility of medicines

Improved peace and order

Improved agricultural production

Access to information technology

Improved tourism industry

22 n e a
Positive Results

More secure & stable government

Fulfillment of social justice/equal opportunity for all

Poverty alleviation/uplift of quality of life

Development of new breed of leaders

Progressive countryside

Stability of country/harmony among people

23 n e a
National Electrification Administration
www.nea.gov.ph
itcsd.nea@gmail.com

24 n e a

You might also like