Access to Sustainable Energy Programme (ASEP) in the Philippines
Strengthening Off-grid Lighting with Appropriate Renewable Energy Solutions (SOLARES) Project
Background, Objectives & Framework
Around three out of ten households in Mindanao do not have access to electricity, according to 2016 data from the National Electrification Administration (NEA). The electrification rate in Mindanao stands at only 75% as of December 2016, that is, 2.97 million electrified households out of 3.97 million potential households. On one hand, 11 out of 20 poorest provinces in the Philippines are in Mindanao, according to 2015 data from the Philippine Statistics Authority (PSA). Three are from ARMM (Lanao del Sur (1st), Sulu (2nd), Maguindanao (5th)) and three from Region 12 (Sarangani (3rd), Sultan Kudarat (7th), North Cotabato (15th)). In fact, more than 50% of the population in ARMM and Region 12 are below poverty line and at least 43% of the households have no access to electricity (see table below). Study from PIDS (2013) showed that there is evidence of a positive relationship between rural electrification and poverty reduction. It showed that household access to electricity in rural areas is associated with a 36% increase in per capita income and a 34% increase in per capita spending. Areas with electricity are more developed when compared to areas without access to it. ESMAP (2002) also indicated that electricity can improve business and productivity in rural areas, provide efficient lighting to families, and could very well improve the quality of life through alleviation of poverty.
While above data from NEA (2016) showed that almost all barangays (99.84%) in Region 12 and ARMM were already electrified, this does not follow that almost all sitios and households in those barangays are also covered. In fact, at least 26% of sitios and 43% of households are not yet served. This is because according to DOE/NEA, a barangay can be considered "energized/electrified" when at least 20 household connections in that barangay had been energized (for off-grid electrification) or when the distribution line reaches the barangay hall or barangay center (for on-grid electrification). This has been the reality in most rural/remote barangays in ARMM and Region 12 where distribution line reaches the barangay hall or barangay center but only a few houses are connecting to the grid.
Based on the consultations with local electric cooperatives, partner NGOs and the community, among the reasons for low connection are the concerns on poverty situation (i.e. lack of capacity to pay due to limited income opportunities of off-grid rural communities), remoteness of sitios and dispersed location of off-grid households which are very impractical or costly to set up a distribution line. Addressing these concerns, the government has been implementing various programs to improve off-grid rural electrification. The DOE has Household Electrification Program (HEP) for off-grid household electrification using mature renewable energy technologies. NEA has Sitio Electrification Program (SEP) focusing on sitios and providing connection subsidies to poor households. The National Power Corporation-Small Power Utilities Group (NPC-SPUG) has generation projects for off-grid areas. Private sector/NGOs, such as Winrock International implementing AMORE project (2002-2013), are also helping the government in its efforts to improve the off-grid rural electrification.
However, despite these interventions, the need for off-grid rural electrification still poses a big challenge as evident by at least 43% or 589,027 off-grid households in ARMM and Region 12 which still have no access to electricity. Along with the need to increase access of off-grid households to RE-based electricity, results of the community consultations also suggest the need to ensure the quality and after-sales support of RE technologies since limited after-sales support or unavailability of RE accessories/ spare parts at the local market/community of the previously implemented projects by the private and government sector had resulted to non-use and/or patronage of RE technologies by the beneficiaries. There is also a need to ensure affordability, innovativeness and cultural sensitivity of financing/ amortization schemes, social acceptability and livelihood opportunities of household beneficiaries to improve their capacity to pay and ensure project buy-in. These concerns are supported by the evaluation reports of the Sustainable Development Solutions (2014) which indicated that 50% of the households they interviewed during the evaluation of AMORE project reported problems with the Solar Home Systems (SHS), of which 65% are battery-related. PIDS (2013) also indicated in their evaluation report on the Cost Effectiveness and Efficiency of DOE-HEP and NEA-SEP that the “willingness to connect” of households remains an issue despite the presence of subsidies for house-wiring and other initial household electrification expenses.
With these challenges and opportunities, this project is proposed. This 36-month proposed project seeks to help improve the energy security and poverty situation of the off-grid rural communities in Mindanao. Specifically, the project seeks to increase access of at least 5,000 off-grid households in Region 12 and ARMM to renewable energy-based electricity, livelihood and financing opportunities. The project shall have strong focus on after-sales support, social preparation/community organizing, capacity building, innovative livelihood and culturally-responsive financing support, and public-private/multi-stakeholder partnerships.
The project shall be implemented by Mahintana Foundation, Inc. in partnership with Peace and Equity Foundation (PEF), the two (2) local Electric Cooperatives (SOCOTECO II, SUKELCO), and the four (4) local Microfinance Institutions/Coops (BMPC, KIMEMCO, KPS-SEED, SCMPC) as co-beneficiaries/implementers. The project shall collaborate with the Department of Energy (DOE), National Electrification Administration (NEA), World Bank (WB), Mindanao Development Authority (MinDA) and other resource organisations implementing ASEP programme in Mindanao. To help improve the situation of the target groups and final beneficiaries in the target areas, the following updated framework, strategies/ components and key activities shall be adopted / implemented:
