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MIF eyed for power transmission project financing

Published Jul 23, 2023 12:39 am
Investors in renewable energy facing challenges connecting their projects to the power grid could tap the Maharlika Investment Fund (MIF) for funding, Energy Secretary Raphael P.M. Lotilla said. “One of the things that was mentioned was that, it (MIF)  would be available for transmission and for other investment areas – those are possibilities,” the energy chief said noting that doing so would enhance the country's transmission facilities and simplify the process. This, as Investors in the power sector face a major problem when it comes to connecting large-scale renewable energy projects to the existing power grid. It's a complicated and ongoing issue that causes a lot of headaches for them. Apart from transmission funding, Lotilla said another investment sphere being explored is the re-emergence of nuclear power developments in the country. “Nuclear is something that is also being studied right now with NEDA (National Economic and Development Authority), we’re having a study being conducted on the policy framework that private sector would be participating in for nuclear power investments,” he stated. On transmission facilities’ buildup, there had been previous pronouncements from the DOE that State financing or public-private partnership (PPP) could turn up as business models that the government could enforce when it comes to forward investments on transmission projects. A 25-year concession deal currently places the operation and management of the country’s power transmission system under the charge of concessionaire National Grid Corporation of the Philippines (NGCP), but since there had been delays in the implementation of much-needed projects, the government is sorting out ways for new investments, while also keeping in mind the legal bounds of the Concession Agreement with the private operator. What was initially laid down was for the State to bankroll new round of investments on transmission facilities or offer it to other interested parties via a PPP arrangement, then concessionaire-firm NGCP will just receive fees for operating the facilities. To firmly establish the scopes where NGCP had failed when it comes to complying with its mandate under the concession, the DOE proposed the conduct of performance audit that it shall carry out jointly with the Energy Regulatory Commission (ERC), National Transmission Corporation (TransCo) as the owner of the transmission assets; and Power Sector Assets and Liabilities Management Corporation (PSALM) as the entity which privatized TransCo via concession in 2009. Without immediate solution to the grid integration, project developers continuously lament that every step of advancement into implementing their projects turns into a back-breaking trek through the treacherous terrain of investments in the Philippine energy sector. As a matter fact, the country’s problematic power grid had been cited as one major factors for the low turnout of the RE capacity auction recently administered by the DOE.

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Raphael Lotilla PPP Maharlika Investment fund power grid DOE
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