ME Philippines - Energy Inclusion Initiative
The Energy Inclusion Initiative (EII) in the Philippines is a joint program between the largest Philippine microfinance network – the Microfinance Council of the Philippines, Inc. (MCPI) -, the Luxembourg NGO Appui au Développement Autonome (ADA), and MicroEnergy International (MEI). The program’s pilot phase is co-financed by the Frankfurt School – UNEP Collaborating Centre for Climate & Sustainable Energy Finance and by ADA.
The initiative relies on a strong experience from the Energy Inclusion Initiative in Peru launched in 2010 in cooperation with ADA and the EnDev/GIZ leading to the implementation of clean energy programs with two Peruvian MFIs. In 2012, the EII won the “Green Finance Award” in Luxembourg. The EII focuses on the potential of microfinance mechanisms to provide clean energy solutions in regions with poor energy infrastructures, reaching triple bottom line results. By enabling access to green energy through inclusive financial services, the EII contributes to local economic development, improved energy access of Microfinance Institutions (MFI) clients, diversification of MFI portfolio and the mitigation of climate change.
Objectives and expected outcomes of the pilot phase
The EII in the Philippines aims at enabling the provision of green energy technologies to micro and small business through MFI-based energy financing. The four main expected outcomes of the pilot phase are:
Outcome 1: The capacities of the MCPI network in the field of energy lending are built.
Outcome 2: Two MFIs of the MCPI network are supported in the establishment of financial products for green energy technologies.
Outcome 3: The capacities of energy service providers to ensure energy equipment quality are reinforced.
Outcome 4: The pilot project is assessed and lessons learned are shared.
EII Implementation phases
The EII project cycle, consisting of 7 phases, involves a thorough analysis of the microenergy and microfinance market (1). The second step consists in the assessment of the main productive activities of the pilot MFIs’ clients and the role that energy plays therein (2). Based on the results of the energy needs assessment, the partners will identify technologies and suppliers most suited for running the pilot (3). The EII will support the MFIs in the development of a business plan and launch the pilot (4). To assure the highest quality possible of energy systems, continuous monitoring of products and suppliers will take place (5), yielding in an eventual adjustment of the business plan (6). After successful termination of the pilot, the EII will evaluate the outcomes and most probably prepare the up-scaling of the initiative (7).
Selection of MFIs
The second on-site mission assessed the suitability of various MFIs for the integration of energy loans into their portfolios and built up a network of potential public and private partners. Selection criteria for institutions included the requirement of a high degree of motivation and commitment to the project, among other qualitative and quantitative factors. People's Bank of Caraga (PBC) and Alalay Sa Kaunlaran, Inc. (ASKI) have been selected for the project’s pilot phase.
People's Bank of Caraga (PBC)
FrankfurtSchool – UNEP Collaborating Centre for Climate & Sustainable Energy Finance