Electric Cooperative System Loss Reduction Project

The main objective of the proposed GEF Philippines Electric Cooperative System Loss Reduction Project is to achieve significant and sustained energy efficiency improvements in rural ECs in order to provide current and prospective viable EC customers with reliable and least-cost power supply over the long term. In this regard, the project would (i) develop and test financial and contractual mechanisms to support private sector investment, management and operation, and risk sharing to support system loss reduction measures in selected ECs; and (ii) support commercial lending to other qualified ECs for efficiency improvements. For (i), the project would pilot the use of investment management contracts (IMCs) to attract private investors to manage and operate selected ECs under long-term, performance-based contracts, and to mobilize private finance without recourse to the government. For those ECs that are yet unable to attract private investors, access to affordable term loans would be facilitated under (ii). Eligible subprojects will be selected based on their ability to generate positive financial returns to the Ecs. GEF financial involvement would be $12m, mostly as credit risk guarantees.