Rural electrification. Hydro electricity  N/A



"Electric Cooperatives Reform Contract": Improving performance and enhancing Joint Ventures for renewable energy production in Electricity Cooperatives (Rural Distribution Utilities)

Country : Philippines
Client : National Electrification Administration (NEA)
Start Date : 16/04/2013
Completion Date : 15/10/2014
Value of services : 666 580 €
Funder : World Bank
Associate/Partner : N/A
Description :
The project aimed at strengthening the performance of the National Electricity Authority (NEA) following various tasks:
- Select a few "ready" Micro Hydro Power Plant (MHPP) Feasibility Studies and accompany developers to financial closure.
- Explore the possibility of Joint Venture (JV) agreements between the private developer and the EC, which is also the off taker, and develop standard JV agreements.
- Train the staff of the Office of Renewable Energy Development (ORED - NEA) in the assessment of the above projects.
- Review NEA´s Performance based lending approach to Electricity Cooperatives (ECs) and propose modified Key Performance Indicators (KPIs), which would improve management and evaluation of ECs.
As off take prices are on a cost plus basis but viewed sometimes as too low, assess the existing formulas and propose alternative rate setting options.
- Review the situation of the Wholesale Electricity Spot Market (WESM) and potential for aggregation of EC Power Supply in the perspective of developing ECs´ capacity to access cheaper power.
Description of the Actual Services Provided A pipeline of 78 MHPP projects were reviewed based on which a short list of 10 most ready projects were identified. The developers and local ECs as well as investors were brought together to reach financial closure and Joint Venture Agreements as well as Power Supply Agreements developed which can serve as Standard templates.
A complete Handbook for MHPP development was produced, with a section on technical, economic and financial aspects and second section on the Filipino legal and regulatory steps from project identification to commissioning.
A team of 49 professionals from NEA and the ECs were trained through a series of 15 days total training sessions over the 18 month project duration.
An in depth review of the NEA (which is the controlling entity of all the ECs) Key Performance System (KPS) was undertaken– i.e. the indicators collected from the ~100 ECs, the way they are collected, and further the weighting system based on which the ECs are scored. Based on this review, some modifications were proposed, particularly on governance indicators which were accepted by NEA.
The consultant then surveyed 75 ECs across the Philippines to inform and train the ECs on the revised KPS and produce a first benchmark sore card, commenting on the impact of indicator revision on global scores.
Review of the rate setting method revealed that investment renewal was insufficiently factored in, and a revised approach proposed.