Agus VI hydroelectric plant. (Photo from psalm.gov.ph)
CAGAYAN DE ORO CITY, Philippines — The proposed rehabilitation of the Agus-Pulangi hydropower plant complex (APHPC) was met with enthusiasm from environmental advocates and power consumers in Mindanao.
“We hope this is a sign that lessons were learned on how unwise it was to flood Mindanao with coal, which only burdened communities and consumers with pollution and higher electricity rates,” said Gerry Arances, convenor of the Power for People Coalition (P4P), a network of civil society organizations, cooperatives, and consumers.
APHC’s rehabilitation aims not only to ensure the reliability of power supply in Mindanao but also to accelerate the country’s shift to clean energy sources — a step for the country to do away with fossil fuels and embrace a more sustainable energy, the coalition hoped.
Environmental and consumer groups have long been urging the government to prioritize the rehabilitation especially when the installed capacity of coal in the island was allowed to rise by nearly ten times in the last decade or from 232 megawatts (MW) to 2,089 MW.
The APHC consists of seven mostly run-of-river hydropower plants with a total installed capacity of 1,001 MW. Six of the seven hydropower plants are located along the Agus River which flows for 36.5 kilometers from Lanao Lake to Iligan Bay. The seventh hydropower plant is the Pulangi 4, located on the Pulangi River in Bukidnon.
Rehab project
The Department of Finance (DOF) is now fine-tuning an arrangement with the Power Sector Assets and Liabilities Management Corporation (PSALM) and the National Power Corporation (NPC) on the funding rollout and implementation of the estimated P16.71 billion rehabilitation project for the decades-old facilities in the APHPC.
Under the proposed memorandum of agreement (MOA), the DOF will be the main implementing agency, loan borrower and budget holder, and loan borrower for the rehabilitation project, while the PSALM and NPC, as owner and operator, respectively, of the APHPC will both serve as the implementing units.
According to DOF, the project is divided into two series.
The first series will involve the rehabilitation of the Agus IV, V, VI, and VII plants in the APHPC, which is expected to generate a total rated capacity of 417.1 MW, said NPC Officer-in-Charge Senior Vice President Melchor Ridulme in his report to Finance Secretary Carlos Dominguez III during the recent DOF Executive Committee meeting.
Ridulme said the second series will rehabilitate Agus I, II, and the Pulangi IV plants, which will generate a total rated capacity of 515 MW.
“Series of Project 1 is already pending approval by the NEDA (National Economic and Development Authority), and the MOA for the proposed arrangement for the loan is being reviewed by the DOF,” Ridulme said.
Out of the 1,001 MW installed capacity of the APHC, only 600-700 MW is currently available, partly because of the limitations of its ageing equipment.
Ridulme said the Series of Project (SOP) 1 is estimated to cost P10.19 billion, while SOP 2 is about P6.52 billion, based on a study done by the World Bank.
Despite this development, Arances said the APHPC rehabilitation should only be the first step towards adopting a more sustainable approach to the country’s energy production and not just a token effort for sustainability.
Arances said there has to be a comprehensive plan to make the vast potential for renewables in Mindanao within reach of every household especially now that plans to eventually phase out coal and to halt the planned entry of another dirty energy source – fossil gas – are nowhere in sight.
‘Keeping an eye’
“We are keeping an eye out lest the rehabilitation be used as a prelude to the privatization of the facilities – a matter which communities and advocates have been resisting for the longest time,” Arances said.
The P4P has also expressed concern over the decision to pursue the rehabilitation project through a loan, set to be managed by the DOF.
The coalition said the DOF, led by Dominguez, has been positioning itself as an authority not only in finance but also in climate engagements and endeavors like the Agus-Pulangi facilities, which have great potential to become a gateway for access to climate financing for climate-vulnerable countries.
Arances said the loan becomes a terrible precedent for how financing for an energy transition will look like in the country amid a global economic crisis and intensifying climate change. It also opens concerns on impacts to the affordability of electricity from Agus-Pulangi, and who would be shouldering additional costs from borrowed funds for its rehabilitation. (davaotoday.com)
