Philippines' Rural Electrification Program
The electricity access rate of the Philippines is 95% as of 2019. The Philippine Rural Electrification Program (REP) accelerated the lighting up of rural areas from a few hundred households to 15 million connections or some 45 million Filipinos over the past 38 years. This also resulted in the rise of small and medium enterprises as well as improving the lives of the rural population.
Under the REP’s Sitios (Sites) Electrification Program, electric cooperatives electrified a total of 125,123 sitios or 84% of the 148,385 total sitios nationwide as of 2020 (https://www.doe.gov.ph).
Philippine electric cooperatives play a significant role in energy infrastructure development for the remote areas of the 7,100-island archipelago. Electric cooperatives (ECS) operate as membership-based, non-profit electricity providers that offer renewable energy solutions at scale across the Philippines. Tarlac II Electric Cooperative in Luzon, Cebu III Electric Cooperative, Inc. in Visayas and Agusan del Sur Electric Cooperative, Inc. in Mindanao are the largest cooperatives.
The National Electrification Administration (NEA) is the government agency that monitors the performance of the 119 electric cooperatives in the deregulated electricity market. Under the Rural Electrification Program, the NEA provides financial, institutional and technical assistance for ECs to improve their operations through increased revenue generation, dependable service reliability, and enhanced operational efficiency.
The NEA allows the ECs to acquire, own, construct, operate and maintain embedded generating facilities within their franchise areas that contribute to greater efficiency and lower cost of generation. The NEA acts as a guarantor for electricity purchases in the Wholesale Electricity Spot Market and supports credit standings. The private sector provides alternative financing to the electric cooperatives through supplemental loans and leveraging their equity capital.
In 2019, the Philippine Renewable Energy Act (Republic Act 9513 codified in 2008) prompted the acceleration of renewable energy projects where electric cooperatives can participate. This mechanism is called the Renewable Portfolio Standard (RPS) where distribution utilities, electric cooperatives and retail electricity suppliers are required to source a specified percentage of electricity from renewable energy sources. The RPS level is currently set at one percent and is expected to increase to ten percent in 10 years.
U.S. exporters can access two procurement areas:
- Electricity infrastructure improvement projects including system loss reduction, kWh replacement and clustering, circuit protection and sectionalizing, major capex such as new construction/upgrading of substations, 69kV sub-transmission lines, distribution line upgrading/rehabilitation, and automated metering infrastructure.
- Renewable portfolio programs including utility-scale solar power systems, solar PV panels, solar tracking mounting system, battery energy storage systems, and inverters/transformers.
The U.S. Commercial Service Philippines assists U.S. exporters in connecting with the project stakeholders and helping to find a local partner in the Philippines. For more information, contact Commercial Specialist Thess Sula at Thess.Sula@trade.gov.