The Philippines AMORE Project: Renewable Energy as a Catalyst for Social and Economic Development

Ellen S. Bomasang

APEC Village Power Workshop November 7-10, 2004

Hanmer Springs, Canterbury, New Zealand

Winrock InternationalWinrock International

Private non-government organizationPrivate non-government organization Currently implementing more than 160 Currently implementing more than 160

projects around the worldprojects around the world Headquarters in state of Arkansas Headquarters in state of Arkansas Project offices in more than 40 countriesProject offices in more than 40 countries Energy programs based in Arlington, Energy programs based in Arlington,

Virginia Virginia

Winrock’s Core ProgramsWinrock’s Core Programs

Clean EnergyClean Energy AgricultureAgriculture Forestry and Natural Resource Forestry and Natural Resource

ManagementManagement Ecosystems ServicesEcosystems Services Leadership DevelopmentLeadership Development Volunteer Technical Assistance Volunteer Technical Assistance

  

Clean Energy Group (CEG)Clean Energy Group (CEG)

Premise: Premise: Energy is a crucial input to Energy is a crucial input to development, and its growth can be met in development, and its growth can be met in an environmentally sustainable manneran environmentally sustainable manner

Goal:Goal: Increase the use of environmentally Increase the use of environmentally sustainable renewable energy (RE) sustainable renewable energy (RE) services in a manner that enhances socio-services in a manner that enhances socio-economic developmenteconomic development

CEG Products and ServicesCEG Products and Services

Technical AssistanceTechnical Assistance Project and program preparation and Project and program preparation and

implementation/managementimplementation/management Policy analysis and guidancePolicy analysis and guidance Institutional capacity buildingInstitutional capacity building Business advisory servicesBusiness advisory services Education and outreachEducation and outreach Financing facilitationFinancing facilitation

Clean Energy Group (CEG)Clean Energy Group (CEG) Focus onFocus on

– Community mobilization and Building local Community mobilization and Building local capacity in REcapacity in RE

– Accelerating RE commercialization and market Accelerating RE commercialization and market developmentdevelopment

– Improving access to rural energy servicesImproving access to rural energy services– Focus on socially and economically productive Focus on socially and economically productive

applicationsapplications– Facilitating industry linkagesFacilitating industry linkages

Renewable Energy Project Support OfficeRenewable Energy Project Support Office (REPSO) network in Brazil, Guatemala, (REPSO) network in Brazil, Guatemala, Nepal, India, Indonesia, South Africa, and the Nepal, India, Indonesia, South Africa, and the PhilippinesPhilippines

Alliance for Mindanao Alliance for Mindanao Off-Grid Renewable Energy Off-Grid Renewable Energy

(AMORE) Program(AMORE) Program

Background on Project Area

One of poorest regions, lowest level of public One of poorest regions, lowest level of public services (e.g., electricity, education, water, health)services (e.g., electricity, education, water, health)

Conflict area with peace and order problemsConflict area with peace and order problems– Former separatist rebel communities, long-time rebel Former separatist rebel communities, long-time rebel

soldiers attempting civilian lives and livelihoods soldiers attempting civilian lives and livelihoods – Some areas still contested/subject of peace negotiationsSome areas still contested/subject of peace negotiations– High risk of violence, including political, inter-clan High risk of violence, including political, inter-clan

conflicts, robbery, kidnappingconflicts, robbery, kidnapping– Heavily armed population with military weaponsHeavily armed population with military weapons– Many private companies limit activities for safety and Many private companies limit activities for safety and

security reasonssecurity reasons

AMORE: Mission Statement

Contribute to peace and development Contribute to peace and development initiatives in Muslim Mindanao by initiatives in Muslim Mindanao by improving the quality of life in improving the quality of life in unelectrified rural communities through unelectrified rural communities through sustainable renewable energy projects sustainable renewable energy projects and effective community organizingand effective community organizing

AMORE: Project Objectives Support electrification of 160+ rural Support electrification of 160+ rural

communities (communities (barangays)barangays) in Mindanao in Mindanao using renewable energy systems for using renewable energy systems for lighting, productive uses, and social lighting, productive uses, and social infrastructure infrastructure

Support peace process by working with Support peace process by working with former rebel communities for social and former rebel communities for social and economic developmenteconomic development

Project duration: February 2002 – Project duration: February 2002 – December 2004December 2004

AMORE Sites

Stakeholders U.S. Agency for International Development

(USAID) Philippine Government, Philippine Department of

Energy (DOE) Autonomous Region of Muslim Mindanao (ARMM) Winrock International (project implementer /

manager) Mirant Philippines (private sector donor)

Stakeholders Beneficiary communitiesBeneficiary communities Sub-grantees/subcontractors (PEI, YAMOG, MDFI, Sub-grantees/subcontractors (PEI, YAMOG, MDFI,

YMFI, SIBAT, SRE, MUFTI, IRG-P, NREL, WorldWater, YMFI, SIBAT, SRE, MUFTI, IRG-P, NREL, WorldWater, NMSUNMSU

Other Philippine partners (rural electric cooperatives, Other Philippine partners (rural electric cooperatives, Philippine Government agricultural, fisheries, micro-Philippine Government agricultural, fisheries, micro-credit, SciTech, power sector agencies, and private credit, SciTech, power sector agencies, and private foundations)foundations)

Stakeholders have complimentary goals that need to be Stakeholders have complimentary goals that need to be balanced: project cannot be focused just on renewable balanced: project cannot be focused just on renewable energy development and RE market developmentenergy development and RE market development

Stakeholders’ Interests/Goals (1)

USAID and Philippine Government: Support peace & USAID and Philippine Government: Support peace & development in Mindanao, ensure communities benefit, development in Mindanao, ensure communities benefit, support clean energy developmentsupport clean energy development

Philippine DOE: Electrify all barangays in country, with at Philippine DOE: Electrify all barangays in country, with at least 30 households served in each barangay least 30 households served in each barangay

ARMM Government: Support development, convince ARMM Government: Support development, convince residents that peace accord & regional government residents that peace accord & regional government provide benefits provide benefits

Mirant Philippines: Help meet its commitment to DOE of Mirant Philippines: Help meet its commitment to DOE of supporting electrification of 1,000+ communities supporting electrification of 1,000+ communities

Stakeholders’ Interests/Goals (2)

Beneficiary communities: access to improved energy and Beneficiary communities: access to improved energy and other services, social and economic developmentother services, social and economic development

Winrock: Support peace & development, effectively Winrock: Support peace & development, effectively implement project while balancing stakeholders interests implement project while balancing stakeholders interests

Compromises necessary due to competing goals: Compromises necessary due to competing goals: – Focus on number of barangays, not full electrification of barangays; Focus on number of barangays, not full electrification of barangays;

– Focus on community organization & social, economic & institutional Focus on community organization & social, economic & institutional

development instead of exclusive focus on energy systemsdevelopment instead of exclusive focus on energy systems

MIRANT Philippines

Largest independent power producer (IPP) in Largest independent power producer (IPP) in PhilippinesPhilippines

Mirant funds rural electrification, in part as a legal Mirant funds rural electrification, in part as a legal obligation, in part as corporate donationobligation, in part as corporate donation

Providing more than $1.5 million in donations Providing more than $1.5 million in donations (approximately $13,000/barangay)(approximately $13,000/barangay)

Cooperation with Winrock under AMORE supports Cooperation with Winrock under AMORE supports the Philippine DOE’s policy of relying in part on the Philippine DOE’s policy of relying in part on IPPs to co-finance and implement rural IPPs to co-finance and implement rural electrification projectselectrification projects

Renewable Energy Technologies Used

Solar PV battery charging stations (BCS), solar Solar PV battery charging stations (BCS), solar home systems (SHS), streetlights, telecom, power home systems (SHS), streetlights, telecom, power systems for other applicationssystems for other applications

Micro-hydro (5 prepared, 3 implemented)Micro-hydro (5 prepared, 3 implemented) Biomass (thermal applications)Biomass (thermal applications) Wind power not used due to low wind resource in Wind power not used due to low wind resource in

project areaproject area PV BCS supported in part due to concerns about PV BCS supported in part due to concerns about

inability to enforce monthly fees (too dangerous to inability to enforce monthly fees (too dangerous to repossess SHS for nonpayment), PV focus now on repossess SHS for nonpayment), PV focus now on SHS, communications, educationSHS, communications, education

Project Approach Not renewable energy (RE) development or RE market Not renewable energy (RE) development or RE market

development development per seper se Use RE for basic service and as catalyst to organize Use RE for basic service and as catalyst to organize

communities for social and economic developmentcommunities for social and economic development In marginalized/neglected communities, the RE In marginalized/neglected communities, the RE

interventions have major impacts on peoples’ perception of interventions have major impacts on peoples’ perception of benefits of peace and hope for future benefits of peace and hope for future

Difficult environment prevented on commercial approaches Difficult environment prevented on commercial approaches to energy system/service supplyto energy system/service supply

Work with BRECDAs to prepare and implement social and Work with BRECDAs to prepare and implement social and livelihood projects, including both RE and/or non-energy livelihood projects, including both RE and/or non-energy projectsprojects

Maximize links between BRECDAs and vendors for repair, Maximize links between BRECDAs and vendors for repair, parts, market expansion, battery recyclingparts, market expansion, battery recycling

Community Level Institutions Due to lack of producer cooperatives or other pre-Due to lack of producer cooperatives or other pre-

existing organizations in most AMORE communities, existing organizations in most AMORE communities, institutions had to be created to manage energy systems institutions had to be created to manage energy systems and collect fees.and collect fees.

BRECDAsBRECDAs (Barangay Renewable Energy and (Barangay Renewable Energy and Community Development Associations) were formed Community Development Associations) were formed

Main BRECDA tasks: Main BRECDA tasks: – Operate and maintain energy systems; Operate and maintain energy systems; – Collect fees and manage O&M fund; Collect fees and manage O&M fund; – If possible, expand service to additional householdsIf possible, expand service to additional householdsAND AND – Pursue other economic and social development activitiesPursue other economic and social development activities

Barangay Renewable Energy and Community Development Association (BRECDA)• BRECDA composed of electrified households, with elected

Chairperson and Treasurer, employs local operator or technician• Manages fee collection, O&M fund accounts• Systems/service is subsidized, but users must pay monthly fees:

$3 (U.S.)/month for service via battery charging station (BCS); $5.40/month for solar home system (SHS)

• O&M fund supports repair, partial cost of battery replacement, expansion of service to new households

• BRECDAs formally register, establish bank accounts• Winrock provides training in financial management, leadership,

and livelihood project preparation

O&M Fee Structure for Barangays with PV BCS Systems

ComponentsComponents Monthly Fees

Battery charging fee (with operator’s wage and cable Battery charging fee (with operator’s wage and cable and clamp replacement cost)and clamp replacement cost)

PhP 70.00PhP 70.00

Battery replacement cost (50%)*Battery replacement cost (50%)* 68.0068.00

Cost of transporting dead battery to recycling depotCost of transporting dead battery to recycling depot 11.0011.00

Livelihood capital build-upLivelihood capital build-up 11.0011.00

Total monthly fee (56PhP/$US)Total monthly fee (56PhP/$US) PhP 160.00PhP 160.00

* The balance will be paid by the member upon battery replacement.

Sample O&M Fee Structure forBarangays w/ Solar Home Systems

Components Monthly Fees

Monthly Lease-to-Own Fee (75% AMORE, 25% BRECDA member; 5-year payback; for expansion of systems to more households)

PhP 118.00

BRECDA O&M service charge (including BCS operator’s and technician’s salaries)

35.00

Battery replacement cost (41.67%)* 125.00

Cost of transporting dead battery to recycling depot 11.00

Livelihood capital build-up 11.00

Total Monthly Fee (56PhP/$U.S.) PhP 300.00

* The balance will be paid by the member upon battery replacement.

Projects Supported

Basic electrification for lighting andHH uses is Basic electrification for lighting andHH uses is major focus in all communities (minimum 30 HH) major focus in all communities (minimum 30 HH)

Social/community services:Social/community services: street/dock lighting street/dock lighting (all), communications, water supply, school (all), communications, water supply, school electrification (others in 25+, )electrification (others in 25+, )

Income-generating Income-generating livelihood livelihood activitiesactivities– Productive use of RE (15+ pilots/demos)Productive use of RE (15+ pilots/demos)– Other improvements to production and marketing, Other improvements to production and marketing,

including many with no energy intervention (30+)including many with no energy intervention (30+)

Social Project Example: TelephonySocial Project Example: Telephony

Evaluate technical options, institutional approachEvaluate technical options, institutional approach Supervised payphones in central barangay locationsSupervised payphones in central barangay locations Testing different business modelsTesting different business models Use of cellular (fixed or handset) or fixed satellite Use of cellular (fixed or handset) or fixed satellite

technologies depending on service availabilitytechnologies depending on service availability Six GSM fixed cellular payphones and two fixed Six GSM fixed cellular payphones and two fixed

satellite phones installed by November 2004satellite phones installed by November 2004 Modest revenue generation for most BRECDAs with Modest revenue generation for most BRECDAs with

donated handsetdonated handset Expanded rollout planned under AMORE 2Expanded rollout planned under AMORE 2

Other Social Pilot Projects

School Electrification/Distance educationSchool Electrification/Distance education– Collaboration with Knowledge Channel Collaboration with Knowledge Channel – Dual-use mini-cinema (TV-DVD) for both Dual-use mini-cinema (TV-DVD) for both

entertainment and educational purposesentertainment and educational purposes– Limited computer/ICT (2 communities)Limited computer/ICT (2 communities)

Potable water supplyPotable water supply HealthHealth

– Link BRECDAs with malaria prevention Link BRECDAs with malaria prevention program of program of Shell Pilippinas FoundationShell Pilippinas Foundation (i.e., (i.e., leverage BRECDA institution)leverage BRECDA institution)

Two Main Types of Livelihoodor Productive Use Projects

Productive use of renewable energy: mostly pilot and Productive use of renewable energy: mostly pilot and demonstration projectsdemonstration projects– Solar thermal and biomass thermal for dryingSolar thermal and biomass thermal for drying– Micro-hydro for milling, workshopMicro-hydro for milling, workshop– Pumping/micro-irrigation for high-value cropsPumping/micro-irrigation for high-value crops– AquacultureAquaculture

Livelihood projects w/no energy componentLivelihood projects w/no energy component– Improved seaweed production (Lantay, credit)Improved seaweed production (Lantay, credit)– Gravity-fed micro-irrigation for vegetablesGravity-fed micro-irrigation for vegetables

** Can also provide TA for non-RE energy interventions (e.g. diesel- Can also provide TA for non-RE energy interventions (e.g. diesel-powered ice-making)powered ice-making)

Livelihood Projects

Livelihood Project Approach Partner Agencies

DOST, BFAR, UNDP

TLRC, DTI

• Work with BRECDAs/producers to assess options

• Build on existing economic activities

• Carragenan seaweed production

• Fishing, aquaculture

• Agriculture

Livelihood/Productive Use Projects: Forms of AMORE Support

Technical assistance Information dissemination Capacity building Assessment of productive use energy

requirements and options (e.g., drying) Capital funding for productive use field

projects including demos, pilots, other Financing facilitation (QUEDANCOR)

AMORE’s Implementation Strategy for Productive Projects

Assess existing livelihood to identify potential Assess existing livelihood to identify potential productive application of RE, AND/OR other productive application of RE, AND/OR other ways to improve to production, post-harvest, ways to improve to production, post-harvest, and marketingand marketing

Prepare feasibility studyPrepare feasibility study Prepare plans using participatory processPrepare plans using participatory process Focus on productive use of REFocus on productive use of RE

AMORE’s Implementation Strategy for Productive Projects

Design and implement training for the Design and implement training for the BRECDA and members to BRECDA and members to manage/implement the projectmanage/implement the project

Facilitate access of BRECDAs to funding or Facilitate access of BRECDAs to funding or credit institutions and market informationcredit institutions and market information

Monitor implementation & institute needed Monitor implementation & institute needed improvement as neededimprovement as needed

Document experiences of implementationDocument experiences of implementation

Productive Demonstrationand Pilot Projects

Solar and biomass-fired drying for fish, rice, Solar and biomass-fired drying for fish, rice, grain, seaweedgrain, seaweed

Micro-irrigation for high-value vegetable Micro-irrigation for high-value vegetable production (PV and treadle pumping)production (PV and treadle pumping)

Grain and coffee milling (micro-hydro)Grain and coffee milling (micro-hydro) Aquaculture—lighting, modest aerationAquaculture—lighting, modest aeration Ice-making (TA only, for diesel-powered system)Ice-making (TA only, for diesel-powered system) In AMORE 2, increased focus on micro-hydro, In AMORE 2, increased focus on micro-hydro,

including for productive uses, and on community-including for productive uses, and on community-based natural resource management (CBNRM)based natural resource management (CBNRM)

Accomplishments• Electrified 141 communities and over 4,240

households with PV and micro-hydro by 8/2004• More than 200 communities and 6,300 households

to be electrified by 12/31/2004• 170 Barangay Renewable Energy and Community

Development Associations (BRECDA) to manage energy systems and implement economic development activities (205 by 12/31/2004)

• Trained BRECDA members on technical issues, administrative and financial management

Accomplishments

• Contributed to peace process by engaging with historically neglected communities

• Recognition by USAID, Philippine government, private donors, and communities of AMORE project performance and benefits

• Positive performance & community requests have led to follow-on AMORE II project (FY2005-09)

• Developed/piloted models (e.g., rural telephony) for broader implementation in AMORE 2

AMORE 2 Follow-On Project October 2004-September 2009

(implementation starts 1/2005) Target: At least 200 barangays including

20 micro-hydro (11,600 households) Support peace & development in conflict-

affection regions through provision of basic rural electrification and related services

AMORE 2 Follow-On Project Strengthen community abilities to

effectively manage natural resources and implement economic development activities,

Micro-hydro sector strengthening to improve ability of Philippine industry and NGOs to assess, plan, and implement micro-hydro projects

AMORE 2 Changes vs. AMORE

Increased focus on use of renewable energy for high value social and productive applications

Major focus on microhydro development Community-based natural resource

management activities, including watershed protection

Develop lower-cost household lighting options, increase cost-recovery