ASIAN DEVELOPMENT BANK

Transcription

1 ASIAN DEVELOPMENT BANK JFPR:PHI PROPOSED GRANT ASSISTANCE (Financed by the Japan Fund for Poverty Reduction) TO THE REPUBLIC OF THE PHILIPPINES FOR THE RENEWABLE ENERGY AND LIVELIHOOD DEVELOPMENT PROJECT FOR THE POOR IN NEGROS OCCIDENTAL December 2003

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3 CURRENCY EQUIVALENTS (as of 24 November 2003) Currency Unit - peso (P) P1.00 = $0.018 $1.00 = P55.68 ABBREVIATIONS ADB Asian Development Bank AMORE Alliance for Mindanao Off-Grid Renewable Energy BAPA barangay power association CBO community-based organization DA Department of Agriculture DENR Department of Environment and Natural Resources DOE Department of Energy EPIRA Energy Power Industry Reform Act JBIC Japan Bank for International Cooperation JFPR Japan Fund for Poverty Reduction JICA Japan International Cooperation Agency kw kilowatt kwh kilowatt-hour LGU local government unit MW megawatt NEDA National Economic Development Authority NGO nongovernment organization NPC National Power Corporation PAC project advisory committee PIM project implementation manual PIU project implementation unit PNOC Philippine National Oil Company PNOC-EDC Philippine National Oil Company Energy Development Corporation PSC project steering committee PSRP Power Sector Restructuring Program PV photovoltaic USAID United States Agency for International Development VPA village power association NOTES (i) (ii) The fiscal year of the Government ends on 31 December. In this report, $ refers to US dollars.

4 I. Basic Data Name of Proposed Activity Country Grant Amount Requested JAPAN FUND FOR POVERTY REDUCTION (JFPR) JFPR Grant Proposal Renewable Energy and Livelihood Development for the Poor in Negros Occidental Philippines $1.5 million Regional Project Yes / (X) No Grant Type (X) Project / Capacity building II. Grant Development Objective(s) and Expected Key Performance Indicators Grant Development Objectives (GDO): The overall goal of the JFPR Project is to achieve poverty reduction through the provision and efficient use of renewable energy supply to promote sustainable livelihood systems for poor local communities in off-grid areas of the Philippines within the framework of public-private-civil society partnership. Expected Key Performance Indicators: The following five key performance indicators will be monitored under the JFPR Project: 1 setup and operation of eight renewable energy systems in off-grid areas, and extension of renewable energy use by a total of about 200 kilowatts (kw); percentage of the community serviced with electricity from renewable energy systems; setup and operation of two sustainable revolving fund mechanisms for electricity connection to household of the poor and for livelihood development; number and percentage of poor households below the regional poverty threshold (average per capita income of $0.27 per day) connected to renewable energy systems; and number and value of renewable energy-based livelihood activities developed. III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures Category Amount of Grant Allocated ($) Percentage of Expenditures (%) 1. Civil Works 160, Goods 240, Training, Workshops, and Seminars 223, Consulting Services 139, Project Management 247, Other Project Inputs (including revolving funds) 350, Contingencies 139, TOTAL 1,500, Incremental Cost (ADB) 75, Quantitative targets for monitoring the performance indicators will be set under the project implementation manual, which is to be prepared after project approval.

5 2 JAPAN FUND FOR POVERTY REDUCTION JFPR Grant Proposal Background Information A. Other Data Date of Submission of Application Project Officer (Name, Position) Project Officer s Division, , Phone) Other Staff Who Will Need Access to Edit/Review the Report (Enter the names of all staff, e.g., team members, who will need access to this application.) Sector Theme Name of Associated ADB- Financed Operation(s) Executing Agency Grant Implementing Agency(ies) (Names, Exact Address, Contact Persons, , Phone, Fax) 6 October 2003 Ms. Xinning Jia Project Economist Southeast Asia Infrastructure Division (SEID) jiaxinning@adb.org Mr. Y. Zhai, SEID Mr. T. Hayakawa, SEID Infrastructure Economic Growth/ Poverty Reduction ADB Loan 1662-PHI: Power Sector Restructuring Program Department of Energy Winrock Unit 1501, Jollibee Plaza, Emerald Avenue, Ortigas Center, Pasig City 1600, Philippines Ms. Katrina V. Ignacio nignacio@winrock.org / (fax) B. Details of the Proposed Grant 1. Description of the Components, Monitorable Deliverables/Outcomes, and Implementation Timetable Component A Component Name Renewable Energy Development and Efficient Use of Energy Cost ($) 643,890 Component Description This component includes, among others, (i) holding dialogues with stakeholders; (ii) forming and accrediting the community-based organizations (CBOs) among the beneficiary groups; (iii) developing information, education, and communication materials to promote the community s understanding of the project component, stimulate the sense of ownership, and encourage participation; (iv) preparing detailed technical design of the eight selected renewable energy systems such as micro hydropower, solar, biomass, and wind systems; (v) installing eight off-grid renewable energy systems; (vi) strengthening the existing barangay power associations (BAPAs) or village power associations (VPAs), and setting up BAPAs/VPAs where no such associations exist, to operate and maintain the renewable energy systems; (vii) developing information, education, and training programs for BAPAs/VPAs on installation, operation,

6 3 Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities Component B Component Name maintenance, and management; (viii) developing a funds collection mechanism for operating, maintaining, and expanding the renewable energy systems; (ix) installing energy-efficient lighting, devices, tools, and equipment; and (x) connecting households to renewable energy-based electricity. A revolving fund will be established and maintained by the implementing agency, in close collaboration with existing or newly created BAPAs/VPAs, to meet basic household electricity requirements. Eight renewable energy systems set up in off-grid areas and extension of renewable energy use by a total of about 200 kw Number of households connected to renewable energy systems Number and percentage of poor households below regional poverty threshold (average per capita income of $0.27 per day) connected to renewable energy-based electricity Percentage of the community serviced with electricity from the renewable energy systems One revolving fund set up for connection of poor households to electricity 48 months Energy-Based Livelihood Development Cost ($) 418,650 Component Description Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities To ensure productive use and sustainable operation of the installed renewable energy sources, financial and technical support will be provided for developing renewable energy-based livelihood opportunities. Support includes, among others, (i) holding dialogues with stakeholders; (ii) forming and accrediting CBOs among the beneficiary groups; (iii) developing information, education, and communication materials to promote the community s understanding of the project component, stimulate the sense of ownership, and encourage participation; (iv) setting up a sustainable livelihood development revolving fund for renewable energy-based livelihood initiatives (for instance, installation of community-owned rice mills to increase rice production value or mini ice plants for cold storage of fish products, as well as small power tools and sewing machines for individual livelihood); (v) providing skills development and on-site training to optimize the use of electricity for income generation; and (vi) identifying potential markets, and promoting/marketing products from such livelihood projects. Number of barangays/sitios (small towns)/ households covered Number and percentage of beneficiary groups formed Number and value of renewable energy-based livelihood activities Number of loans processed and disbursed One revolving fund set up for livelihood development Number of training sessions conducted for renewable energy and livelihood development 36 months

7 4 Component C Component Name Project Management and Poverty Impact Assessment. Cost ($) 298,442 Component Description This component will support overall project coordination and reporting, ensure a highly participatory management approach, and monitor efficiency and effectiveness of project implementation. The implementing agency will design a community-based monitoring system in which the CBOs will directly participate in project monitoring and evaluation. A poverty impact assessment will be conducted around 6 months before the Project is completed, to evaluate incremental benefits of the Project and assess the ability of the households in the target communities to meet their own basic needs. For this purpose, a control area for evaluating project incremental benefits will be identified, and baseline data and indicators will be developed to measure the actual Project impacts on poverty reduction. Monitorable Deliverables/Outputs Inception report Quarterly progress reports Semiannual project review reports (for the first year of implementation) Annual project review reports (for the succeeding years) Monthly financial reports Annual audited financial reports Project completion report Poverty reduction impact report Implementation of Major Activities: 48 months Number of months for grant activities 2. Financing Plan for Proposed Project to be Supported by JFPR Financier Amount ($) JFPR 1,500, Government 239, Other Sources (Please identify) 3. Genesis Total 1,978, , (contributions from private sector and civil society) The Government of the Philippines, through the Department of Energy (DOE), aims to achieve 100% electrification at barangay level by the year However, it is expected that not all households can be electrified within the said period due to technical as well as financial constraints to on-grid expansion and connections. It is anticipated that some households, especially those located in island and upland communities will remain unelectrified due to their remoteness and economic non-viability. Interest in exploring and developing the application of renewable energy sources for off-grid electrification is therefore growing. But the technical, managerial, and financial sustainability of such off-grid electrification programs remains an issue, considering that the poorest of the poor live in those areas. The challenge therefore is how to build up local capacity for developing and implementing development programs that link poverty reduction, sustainable energy development, and livelihood activities promotion with the active participation of key stakeholders.

8 5 The Government requested the Asian Development Bank (ADB) to prepare, through the Japan Fund for Poverty Reduction (JFPR), an innovative poverty reduction project to pilot renewable energy and livelihood development in poor off-grid rural communities in Negros Occidental. The Renewable Energy and Livelihood Development for the Poor in Negros Occidental (the JFPR Project) was prepared through a participatory process involving various stakeholders. The proposal is based on the findings of the Appraisal Mission and understanding reached during local and national consultations with representatives from central, provincial, and district government agencies; key agencies and companies in the energy sector; relevant aid agencies; nongovernment organizations (NGOs); and other civil society groups. The JFPR Project will target the low-income groups in eight off-grid villages in Negros Occidental, who depend mainly on the use of kerosene, batteries, and candles for their current energy requirements. The expected household beneficiaries total about 2,480, around 35% of whom live below the regional poverty threshold. 4. Innovation The JFPR Project highlights the innovation of sustaining rural electrification through the community participator approach by (i) providing renewable energy sources in poor off-grid communities; (ii) mobilizing communities; (iii) promoting the communities understanding of the project and stimulating their sense of ownership; (iv) promoting income-generating activities to reduce poverty in the areas; (v) building local capacities to manage, maintain, and operate the JFPR Project; and (vi) supporting publicprivate-community partnership essential for implementation success. 5. Sustainability For technical sustainability, local stakeholders (local government units [LGUs], beneficiary communities, and existing or newly formed BAPAs/VPAs) will be involved in project design, implementation, and management throughout the Project s life. Central to the sustainability of the Project are the commitment and readiness of the beneficiary communities to operate, maintain, use, and expand the renewable energy systems installed and livelihood activities developed under the Project. The Project will cultivate a sense of ownership among its beneficiary communities through focused information, education, and communication programs; and intensively prepare the beneficiary communities to sustain the renewable energy systems and livelihood activities themselves through technical and administrative skills development, funds build up, and promotion of renewable energy applications in village-based livelihood opportunities. After the assistance period ends, the Project will be turned over to the beneficiary communities who will then take responsibility for operating and maintaining the renewable energy systems, and promoting livelihood development. For financial sustainability, the Project will be sustained by the beneficiaries willingness to pay arising from the additional income that will be realized at the household level due to (i) productivity improvements and increased production value with the availability of electricity; (ii) creation of livelihood opportunities in the areas; and (iii) savings from forgone fossil-fuel consumption, hauling and transportation cost. An energy service charge will therefore be recommended for cost recovery, comparable with current alternative energy costs that the targeted households pay. The recommended fee, varying for subprojects in the range of P10-35 per kilowatt-hour (kwh) or about $ per kwh, is much lower than the existing expenditures incurred by the target beneficiaries for their energy consumption, which are about P60-75 per kwh or about $ per kwh. In addition, the Project can tap contributions from the universal charge 2 imposed under the Energy Power Industry Reform Act (EPIRA) to support missionary electrification, 3 since it could be 2 Universal charge is a charge embedded in the power rates imposed to all electricity end-users, and is dedicated to recover stranded costs and finance electrification efforts in financially nonviable areas. 3 Missionary electrification refers to government-private partnership electrification initiatives in financially nonviable villages and barangays in the Philippines.

9 6 considered a government-private partnership for electrification in nonviable areas. Further, since some of the subproject sites are located in an energy resource development zone in Negros Occidental, as stated in DOE Regulation 1-94, 4 these subprojects can source financial support of P0.01 per kwh from electricity generators. Such financial support will contribute much to the sustainability of the Project. 6. Participatory Approach The Project emphasizes close stakeholder cooperation among central government, LGUs, NGOs, private sector, and communities. The community-based approach has been applied from the very start of project design and preparation. The eight subproject sites were selected through stakeholder consultations involving LGUs, NGOs, private sector, and communities, where the selection criteria were developed. During implementation, the implementing agency is to promote the community s understanding of the project, stimulate the sense of ownership, and encourage participation. The communities will contribute to renewable energy installation, and community-based cooperatives will be established for livelihood development. The BAPAs/VPAs will be established where no such association exists, and the capacity to operate and manage the renewable energy systems as well as the revolving fund for electrifying poor households will be built up. DOE, in cooperation with LGUs, will oversee project implementation and provide guidance. Primary Beneficiaries and Other Affected Groups and Relevant Description Unelectrified communities of eight off-grid villages in Negros Occidental, which rural electric cooperatives considered technically and financially nonviable, with more than 100 households and about 2,480 beneficiaries, most of whom live below the regional poverty threshold (average per capita income of $0.27 per day) Sitio Cabayabasan, Montilla, Moises Padilla Sitio Bais, Yubo, La Carlota City Barangay Bunga, Don Salvador Benedicto Barangay Gawahon, Victorias City Refugio Island, San Carlos City Lakawon Island, Cadiz City Molocaboc Island, Sagay City Sitio Tabadiang, Minoyan, Murcia Other Key Stakeholders and Brief Description National government represented by National Economic Development Authority (NEDA), DOE, and Technology Livelihood Resource Center under Department of Science and Technology (DOST) Provincial government of Negros Occidental Local government units of Bacolod City, Victorias, San Carlos City, Sagay City, Don Salvador Benedicto, La Carlota City, Moises Padilla, Bago City, Minoyan, Gawahon, Cauayan Philippines National Oil Company Energy Development Corporation (PNOC-EDC), government-owned energy corporation with energy exploration activities in Negros Occidental Existing community organizations and BAPAs/VPAs based in the target communities Beneficiary communities NGOs to be involved in project implementation 7. Coordination The JFPR Project was developed in close consultation with other multilateral and bilateral assistance agencies including the World Bank, the Japan Bank for International Cooperation (JBIC), and the Japan International Cooperation Agency (JICA). The World Bank is preparing a rural power project in the Philippines focusing on policy reform and strengthening of rural electric cooperatives. JBIC has an ongoing initiative on geothermal development in the Philippines. JICA is active in supporting renewable energy for rural electrification in the Philippines. During project preparation, the JFPR Project concept 4 DOE Regulation 1-94 imposes on power producers and energy resource developers a one-centavo per kilowatt-hour of the electricity sales to recompense the LGUs or regions hosting such energy undertakings. The fund can be used in the area for electrification, development and livelihood, reforestation, watershed management, health and/or environment enhancement.

10 7 was shared with the concerned staff of the World Bank, JBIC, and JICA. All showed interest in the Project, particularly the innovation of sustaining rural electrification by providing renewable energy sources, promoting income-generating activities, building the capacity of the private sector and community, as well as supporting public-private-community partnership. The Project will continue information exchange with the agencies during project implementation. During project preparation, other ongoing rural electrification and livelihood development programs were consulted, including the sustainable rural enterprise program in Visayas in partnership with the United States; the Alliance for Mindanao off-grid renewable energy in Mindanao funded by the United States Agency for International Development (USAID); and the renewable energy program in Palawan funded by Pilipinas Shell Foundation. The experiences as well as lessons learned were considered in designing and preparing the Project. 8. Detailed Cost Table Please refer to Appendix 1 for the detailed cost estimates. C. Linkage to ADB Strategy and ADB Financed Operations 1. Linkage to ADB Strategy and Relevant Technical Assistance Document Country Strategy and Program Update ( ) Poverty Partnership Agreement TA 3422-PHI: Rural Electrification Institutional Strengthening (TA Completion Report) TA 4151-PHI: Promotion of Good Governance in the Restructured Power Sector Document Number Date of Last Discussion Objective(s) Sec.M October 2002 ADB supports rural infrastructure including power and assists in accelerating development in rural areas by focusing on improvement of rural livelihood, using a community-based, demanddriven participatory approach (which the JFPR Project has complied with). October 2001 ADB supports the Philippine Government s development priorities emphasizing infrastructure development and comprehensive human development, and recognizes the high quality of participation of civil society in the development of the principles of poverty reduction (which the JFPR Project has complied with). IN February The TA aims to upgrade, develop and strengthen 2003 institutional capabilities in rural energy planning, policy and program formulation, and project implementation. The TA recommends major changes to the rural electrification approach in the Philippines, among them, developing capacities of new and renewable energy technologies as well as testing integration of livelihood programs into the rural electrification program to help reduce poverty and enhance the sustainability of projects (which the JFPR Project has complied with). July 2003 One of the main components of the TA will develop a 5-year missionary electrification development plan (which supports the JFPR Project providing policy, regulatory framework, and incentive structure to promote missionary electrification development).

11 8 2. Linkage to Specific ADB-Financed Operation Project Name Project Number Power Sector Restructuring Program (PSRP) ADB Loan 1662-PHI Date of Board Approval 24 November 1998 Loan Amount ($ million) State the above-mentioned project s development objective The principal objective of the PSRP is to create competitive electricity markets by unbundling generation and transmission, and providing open and equal access to transmission and distribution. The PSRP will achieve operational improvements and increased efficiencies in distribution operations. The program loan will help finance the adjustment costs associated with power sector restructuring. Actions under the PSRP will support the objectives: (i) creating an enabling legal and regulatory environment to support competitive markets in electricity; and (ii) unbundling and corporatizing the operations of National Power Corporation (NPC) to facilitate the introduction of competitive markets in electricity. Recognizing that potential rural consumers are inaccessible to economically viable electrification, the PSRP promotes sustained rural electrification. In this connection, the JFPR Project will be conceptually linked to the PSRP through a pro-poor equitable energy distribution mechanism and use of renewable energy in nonelectrified off-grid areas to encourage livelihood and sustained rural development. The JFPR Project will complement the ongoing power sector reform by promoting renewable energy for off-grid applications in nonelectrified areas, specifically targeting the rural poor households in these areas. 4. List the project s main components 5 No. Component Name Brief Description 1. Create an enabling legal and regulatory framework 2. Unbundle and corporatize NPC s operations 5. Rationale for Grant Funding versus ADB Lending The component aims to implement policy reforms including the enactment of EPIRA, which extends assistance to financially and technically nonviable areas for grid connection, as well as the application of renewable energy sources for electricity generation. This component aims to unbundle NPC s operations and strengthen the Strategic Power Utilities Group (SPUG) in undertaking missionary electrification, especially in off-grid poor communities. The JFPR Project is expected to integrate livelihood development in the application of renewable energy systems in off-grid areas. It will demonstrate poverty reduction in remote communities through promotion of public-private-community partnership, enhancement of local capacities, and development of livelihood activities. Such an intervention is a new area for the Government to invest in. Familiarization in operation and management of such activities is necessary through pilot testing using grant funds. 5 The components related to the JFPR Project are highlighted.

12 9 D. Implementation of the Proposed Grant 1. Provide the Name of the Implementing Agency Winrock will be recruited by ADB under direct selection procedures in accordance with ADB s Guidelines on the Use of Consultants, and it will be responsible for the dayto-day implementation of the project components. Established in 1985, Winrock is a recognized NGO in promoting clean and reliable energy services, using renewable energy technologies, improving livelihoods, and enhancing economic and social development. In the past few years alone, Winrock, in coordination with its network of Renewable Energy Project Support Offices, has been instrumental in bringing on-line more than 720 megawatts (MW) of biomass, wind, and hydropower capacity, and in installing more than 10,000 off-grid solar photovoltaic (PV), wind, and small hydro systems. The Alliance for Mindanao Off-Grid Renewable Energy (AMORE) Program in Mindanao highlights Winrock s performance in promoting renewable energy and sustainable development in the Philippines. AMORE is an ongoing program of $8.0 million funded by USAID. It aims to electrify remote rural communities in western and central Mindanao and the Autonomous Region of Muslim Mindanao by installing renewable energy systems in the chosen communities, and preparing the communities to continually run, maintain, and benefit from these systems as full owners. After over 1-year of implementation since April 2002, renewable systems have been installed in 94 barangays, while installation is still ongoing in additional 59 barangays. In all the target barangays, livelihood opportunities have already been identified and skills development is being undertaken. Winrock's major sources of international financial support include, among others, (i) multilateral financial institutions such as the World Bank and ADB; (ii) governments, foundations, and/or international NGOs of Denmark, Netherlands, and United States; and (iii) United Nations agencies including UN Foundation. The major local financial sources in the Philippines include, among others, the DOE, the Department of Environment and Natural Resources (DENR), and the Department of Agriculture (DA). For the year 2002, Winrock had total net assets amounting to $74,642,436, and generated a total revenue of $39,000,275.

13 10 2. Risks Affecting Grant Implementation Type of Risk Brief Description Measure to Mitigate the Risk Institutional The scheduled national election in mid- DOE underwent an institutional 2004 and consequent likely reshuffling reorganization in 2002 and dedicated of government agencies that may result an Electric Power Industry in undesirable delays in project Management Bureau (EPIMB) to implementation ensure proper implementation of missionary electrification. The relatively stable positioning of the working-level staff will ensure continuity of project implementation. Governance Political will and commitment of national government and LGUs to support the JFPR Project Uneasiness of individuals and residents working with NGOs Limited community understanding that may affect the effective mobilization and organization of residents in the area Duplication and overlapping of functions among LGUs, communities, and NGOs Transparency and accountability of the implementing agency in undertaking the JFPR Project Effectiveness and efficiency of the implementing agency in implementing the JFPR Project Level of acceptance and participation of household beneficiaries that may not be strong enough in the initial stages of Foster government, particularly LGUs, participation in project design, preparation, and implementation, and encourage their contribution Good track record of the implementing agency working in the subproject areas, and its effectiveness in communicating with local residents Engage communities in project design, preparation, and implementation for a sense of ownership Clearly defined project organizational structure and cooperation of all parties Regular reviews and monitoring of project progress and performance Approval of annual work programs and financial plans by Project Steering Committee. Submission of monthly financial reports, annual audited financial reports, quarterly progress reports, and semiannual/ annual project review reports. Review of accomplishment performance Set up of Project Steering Committee and Project Advisory Committee that will advise and guide the project implementation unit for efficient and effective project implementation Engage communities, particularly targeted beneficiaries, in project design, preparation, and

14 11 Infrastructure project implementation, particularly during rainy season Bad road condition may delay transport of equipment and machineries Peace and order situation implementation for a sense of ownership Develop local resources that can be used as alternatives Encourage local volunteers in the delivery and transport of hardware Central and local governments assured security stability in the project area. JFPR appraisal mission further verified through field visits. The implementing agency s experience in Mindanao attests to its credibility in mitigating unexpected situations related to peace and order. 3. Incremental ADB Costs Component Incremental Bank Cost Amount requested $75,000 Justification While the JFPR Project is linked to the counterpart loan (Loan 1662-PHI), the nature of implementation is different, and the project areas are not necessarily bound to the same geographic areas (the counterpart loan is a Program Loan, and is managed from the capital Manila, while the proposed JFPR project is located in Negros Occidental, an island province). The incremental costs are deemed necessary to cover (i) a staff consultant in the inception phase to expedite project start (3 person-months), and (ii) a JFPR liaison officer during project implementation to assist in coordinating and monitoring (10 person-months intermittently over 4 years). Type of work to be rendered by ADB A staff consultant is to be hired by ADB under ADB s Guidelines on the Use of Consultants in the inception phase, to assist the responsible project officer in (i) developing a project implementation manual (PIM); (ii) developing a work plan and implementation schedule; (iii) setting up the project implementation unit (PIU) based in Negros Occidental Province; (iv) guiding the implementing agency and the targeted community based organizations and groups in familiarization with relevant ADB guidelines and procedures; and (v) conducting consultation and information workshops. A JFPR liaison officer is to be hired by ADB under ADB s Guidelines on the Use of Consultants during the project implementation period, to assist the implementing agency in facilitating community participation and NGO collaboration following the relevant ADB guidelines and procedures, and assist the responsible ADB project officer in (i) coordinating

15 12 project implementation among ADB, DOE, and PIU; (ii) monitoring project performance; (iii) supervising implementation progress; (iv) reviewing the project progress; and (v) undertaking semiannual/ annual review missions with ADB and DOE. The ADB project officer, in collaboration with DOE, will conduct the JFPR inception mission byaround 3 months after the Project starts. JFPR annual review missions will be conducted by the ADB project officer, in collaboration with DOE. 4. Monitoring and Evaluation Key Performance Indicator Reporting Mechanism Plan and Timetable for Monitoring & Evaluation Setup and operation of eight renewable energy systems in offgrid Inception report areas, and extension of Quarterly progress reports renewable energy use by a total of about 200 kw Percentage of the community serviced with electricity from renewable energy systems Setup and operation of two sustainable revolving fund mechanisms for electricity connection of the poor and for livelihood development Number and percentage of poor households below the regional poverty threshold (average per capita income of $0.27 per day) connected to renewable energy systems Semiannual/annual project review reports Project completion report Project poverty impact report The PIM, to be developed during the inception phase, will outline the work plan and implementation schedule, as well as detail deliverables and outputs for monitoring and evaluation. The implementing agency is to submit to DOE and ADB, with copies to the Project Steering Committee and Project Advisory Committee, (i) a progress report every quarter, (ii) a semiannual review report in the first year of implementation and annual review report in the succeeding years, and (iii) project completion report and poverty impact report at the end of the assistance. Number and value of renewable energy-based livelihood activities developed ADB and DOE will review the reports, and undertake (i) a project inception mission around 3 months after the project starts, (ii) annual project review missions, and (iii) project completion review mission at the end of the assistance.

16 13 5. Estimated Disbursement Schedule Fiscal Year (FY) Amount ($) FY ,000 FY ,000 FY ,000 FY ,000 Total Disbursements 1,500,000 E. Clearances Cleared By Name / Division / Signature Comments Mr. Khaja Moinuddin 1. Director General of the relevant regional department [X] Cleared / Not Cleared Comments: 2. Director of the division in the relevant regional department or resident mission Mr. Patrick Giraud Name / Division 3. Staff Review Committee (SRC) Ms. S. Akhtar, Deputy Director members General, SERD (Chair) Mr. P. Giraud, Director, SEID Ms. E.L. Araneta, OGC Mr. M. Ahmed, RSFI Mr. P. Choynowski, EREA Mr. T. Dojima, COPP Mr. M. Araki, OCO Mr. B. van Ommen, OCO 4. Other reviewers Mr. L. B. Sondjaja, COCS Ms. H. Huang, CTL Mr. H. Wang, OED Mr. R.S. Ondrik, PhCO Mr. G. Curtis, NGOC Ms. I. J. Simbolon, RSES Ms. N. Ikemoto, RSES Ms. S. K. Price, RSES Mr. P. Abeygunawardena, ECID Mr. S. Tumiwa, SAID Mr. M. Minc, PhCO 5. CC list Mr. Y. Zhai, SEID [X] Cleared / Not Cleared Comments: Comments [X] Cleared / Not Cleared Comments: [X] Cleared / Not Cleared Comments: F. Checklist OCO will use the answers you provide to the following questions to evaluate the application s eligibility for funding. After answering yes or no to questions 1 to 7 below, refer to the section number in the application where the question is fully addressed. DO NOT provide detailed description below as details should be included in the relevant sections of page 1 and sections B to D. 1. Does the application support activities that will assist the poorest and most vulnerable groups eligible for JFPR funding? (X) Yes / No

17 14 Response is found in Section B3. 2. Do the proposed activities fit within at least one of the following basic purposes of the JFPR: a. Support innovative social programs that directly respond to the needs of poor and vulnerable groups in recipient countries and have high potential for ameliorating their destitute living conditions? b. Provide relatively rapid, demonstrable benefits for affected populations through initiatives and mechanisms with positive prospects for sustainability over the long term? c. Provide direct assistance to programs designed and implemented by local populations, civil society, and NGOs to facilitate their empowerment and enhance their participation in the development process? (X) Yes / No Response is found in Section B3/4/5. 3. Are the proposed activities designed and expected to be implemented with the full participation of local community groups and NGOs? (X) Yes / No Response is found in Section B6 4. Do the activities support interventions that will have a catalytic effect or magnify the impact of ADBfinanced operation(s)? (X) Yes / No Response is found in Section C. 5. Does the application identify methods to monitor and evaluate outcomes, implementation progress, and the impact of the grant on the beneficiaries? (X) Yes / No Response is found in Section D4. 6. Are Japanese NGOs participating in this JFPR activity? Yes / (X) No No direct participation in the JFPR Project is anticipated. 7. Have Japanese aid agencies (e.g., JBIC, JICA, etc.) been consulted in the development of the JFPR application? (X) Yes / No Response is found in Section B7. Please confirm statements 8-16 below. 8. Proposed JFPR activities are not eligible or cannot be funded under loans, or through other sources of funding available to ADB. (X) Confirmed 9. Proposed JFPR activities are not being used to prepare projects or grants, or supplement existing project or grant preparation activities being funded through JSF or other project/grant preparation funds. (X) Confirmed 10. The application does not include pilot activities that are not linked to ADB-funded operations in the pipeline or under implementation. (X) Confirmed / Not Applicable 11. The application includes an exit strategy or a mechanism to ensure long-term sustainability. (X) Confirmed 12. The legal status, financial soundness, track record, and arrangements for use and accounting of grant funds have been checked for grants that are expected to be executed by community groups or NGOs.

18 15 (X) Confirmed / Not Applicable 13. Where funding of incremental costs (staff or consultants) for grant preparation and/or implementation is requested, a full justification is provided. (X) Confirmed / Not Applicable 14. The grant will not include study tours or foreign training. (X) Confirmed 15. The application does not include support for academic training, research work, and core program activities of global/regional programs. (X) Confirmed / Not Applicable 16. The director-general and the director of the relevant regional department have endorsed the grant activity. (X) Confirmed Appendixes 1. Detailed Cost Estimates 2. Fund Flow Arrangement 3. Implementation Arrangements

19 DETAILED COST ESTIMATES 16 Code Supplies and Services Rendered Unit Costs Contributions ($) Quantity Cost Total JFPR Units Component 1. Renewable Energy Development and Energy Efficiency Subtotal: Per Unit ($) Amount Method of Procurement Government Private Sector Communities 857, , ,569 32,720 60, Civil Works Subtotal: 310, , , , Land acquisition, right-of-way for RE sites 110, ,000 10, Concrete foundations, powerhouses, shafts, channels, and related support structures for the installation of wind turbines, micro hydropower systems and larger size PV panels (20% community contribution, in kind) 1.2 Equipment, furniture and Furnishings Subtotal: Lump sum 200, ,000 Direct purchase 40, RE equipments and electrical supplies Lump sum 200, ,000 Direct purchase RE O&M basic tool 5 basic kits per RE site Basic kit 5 *8 50 2,000 2,000 Direct purchase 219, ,500 4, Furniture and furnishing of training rooms Lump sum 4,500 4,500 RE equipment, miniturbines, etc. for technical training and demonstration Training equipment, such as, LCD & OH projectors and screen, photo/video cameras, audio/video-system, computer sets, printers, copier, etc. 1.3 Goods and Consumables Subtotal: General training aids and materials such as stationery, writing tools, publications, blackboards, etc RE training books, manuals, 50 pax x 8 RE sites (10% contribution from the Government) Lump sum 3,500 3,500 Direct purchase Lump sum 9,000 9,000 Direct purchase Lump sum per year 13,389 12, ,500 4,500 4,500 Direct purchase Sets 50*8 20 8,889 8,000 Direct purchase Training, Workshops, Seminars Subtotal: 47,400 43, , Renewable energy technical training, workshops and seminars (incl. costs for resource persons, venue and 10 participants per course x 4 days x 8 project sites, of which 10% community contribution for local venue and logistics) Activities 10*4* ,800 43,200 3,600 Appendix 1

20 Code 1.5 Supplies and Services Rendered Energy-efficient systems trainings (including costs for resource persons, training materials, venue, and logistics, etc., of which 30% contribution from the Government) Unit Costs Quantity Cost Total JFPR Units Per Unit ($) Amount Method of Procurement Contributions ($) Government Days 2* Private Sector Communities Consulting Services Subtotal: 118,190 63,270 15,000 32,720 7, Assessment of social, economic, political viability of proposed 30 person-days (in a team of 2 domestic consultants) per site FS 30 person-days Per diems ( pax) Person-day 30* ,800 16,800 Person-day 30*4 28 3,360 3, EE technical consultant Person-day Technical Consultant for Energy Efficiency One renewable energy specialist (micro-hydro, solar, wind, biomass) One community organizer supervisor Community organizers (2 organizers per sites) Local community organizers/volunteers (monthly allowance only), of which 20% is community contribution (in kind) - 2 per site X 8 sites Local community technicians/volunteers (monthly allowance only), of which 20% is community contribution (in kind) - 1 per site X 8 sites Personmonth Personmonth Personmonth Personmonth Personmonth Personmonth 10 1,200 12,000 12, , ,750 3,750 8* ,720 30,720 8*2* ,000 19, * ,000 9, Other Project Inputs Subtotal: 150, , Revolving credit fund for investments in RE material, devices and equipment and connection of local households to RE-based 150, ,000 electricity Component 2 - Sustainable Livelihood Development Subtotal: 604, ,650 40, ,500 29, Goods and Consumable Supplies Subtotal: 3,000 3, General training aids and materials, blackboards, publications and supplies Lump sum/year ,000 3,000 Direct purchase 2.2 Training, workshops, seminars Subtotal: 276, ,000 40,500 40,500 27,000 17

21 Code 2.3 Supplies and Services Rendered Five social preparatory training courses and activities, (incl. costs for resource persons, venue and 50 pax x 8 RE sites, of which 10% community contribution for local venue and local logistics and 30% government and private sector contribution) Project orientation & planning Development mapping & community needs assessment Basic leadership & organizational management Basic course on development cooperation & advocacy Others (gender, conflict management, group building, etc) Training programs on energy-based livelihood development with 4 courses, at 8 sites, 50 pax including, resource persons, meals, accommodation, transport and honorarium (10% community contributions for logistics and venues, 30% government and private sector contribution) Project development and management and feasibility study preparation Basic financial management Social enterprise and entrepreneurship development Livelihood technology packages (3) Exposure/field trips Unit Costs Contributions ($) Quantity Cost Total JFPR Units Per Unit ($) Amount Method of Procurement Government Private Sector Communities Activities 5*50* ,000 90,000 22,500 22,500 15,000 Activities Lump sum/year 4*50* ,000 72,000 18,000 18,000 12, ,000 6,000 6,000 Consulting Services Subtotal: 125,050 47, ,000 2, Appendix Microfinance specialist (for 30 person-months intermittently for 4 implementation years) Training specialist (2 pax per 30 pms) Livelihood specialist (2 pax per 30 pms) Lump sum 10,000 10,000 Personmonth Personmonth 30* ,000 30,000 30* ,000 30, Microfinance specialist (1 pax per 30 pms) Person- 30* ,000 15,000

22 Code Supplies and Services Rendered One economic and social specialist (livelihood development) One community organizer supervisor One community organizer for 2 sites Local community organizers/volunteers (monthly allowance only), of which 20% is community contribution (in kind) - 1 per site X 8 sites Unit month Personmonth Personmonth Personmonth Personmonth Costs Quantity Cost Total JFPR Units Per Unit ($) Amount ,000 15, ,450 3,450 1*4* ,600 9,600 Method of Procurement Contributions ($) Government Private Sector Communities 1*8* ,000 9, Other Project Inputs Subtotal: 200, , Revolving fund for RE-based livelihood activities Lump sum 200, ,000 Component 3 - Project Management and Poverty Impact Assessment Subtotal: 377, ,442 78, Equipment, Furniture and Furnishings Subtotal: Desktop computer with printer Unit 5 1,000 5,000 5,000 Direct purchase Laptop computer Unit 2 2,000 4,000 4,000 Direct purchase Computer software Unit Direct purchase Flat bed scanner Unit Direct purchase Fax machine Unit Direct purchase 12,500 10,500 2, Office furniture (tables, chairs, etc.) Unit ,000 2, Photocopying machine Unit 1 1,000 1,000 1,000 Direct purchase 3.2 Workshops, Training, Seminars, Conferences, Publications Subtotal: Project Management Trainings Staff development Project planning & assessment Lump sum/year Lump sum/year 20,342 11,542 8, ,000 4,000 4, ,600 2, PME systems development Lump sum Media liaison and coordination meetings (quarterly) Meetings 4* ,800 4,800 19

23 Code Supplies and Services Rendered Dissemination workshops and conferences with local government units and other relevant agencies (Negros Occidental), 50% from government contribution Unit Costs Contributions ($) Quantity Cost Total JFPR Units Per Unit ($) Amount Method of Procurement Government Meetings 4 2,000 8,000 4,000 4,000 Private Sector Communities 3.3 Consulting Services Subtotal: 28,600 28, Poverty impact assessment Lump sum 20,000 20, Financial auditing Audits/year 4 1,500 6,000 6, Web site expert Project management expert Personmonths Personmonths 3.4 Management and Coordination of this Component Subtotal: Component 3 - Staff 2 1,000 2,000 2, Project manager Month ,800 28, Project assistant Month ,200 19, Policy specialist Month ,000 8, MIS specialist Month ,000 3, PME specialist Month ,000 9, Information education & communications specialist Month ,000 6, Administrative/ finance officer Month ,400 14, Accountant Month ,000 5, Bookkeeper Month ,600 9, Secretary/administrative assistant Month ,200 7, Driver Month ,200 7, , ,800 67, DOE project officer Month ,600 33, Travel and per diem PIU project staff for site visits (4pax x 15 days/quarter x 4 yrs.) PIU project staff coordination to Manila HQ (2 pax x 5 days/trip x 4 trips) Per diem/ day Per diem/ day 4*15*4* ,000 48,000 2*5*4 40 1,600 1, Appendix 1

24 Costs Contributions ($) Code Supplies and Services Rendered Unit Quantity Cost Total JFPR Units Per Unit ($) Amount Method of Procurement Government Private Sector Communities PIU project staff coordination to Manila HQ (2 pax x 5 days/trip x 4 trips) Air fare/ year 2* ,200 1, IA visit field (4 pax x 5 days/trip x 5 Per diem/ 4*5*5 35 3,500 3,500 trips) day IA visit field (4 pax x 5 days/trip x 5 Air fare/ year 4* ,000 3,000 trips) EA review mission (4 pax x 5 days/trip x Per diem/ 4*5*5 35 3,500 3,500 5 trips) day EA review mission (4 pax x 5 days/trip x Air fare/ year 4* ,000 3,000 5 trips) Operational costs Report preparation (documentation and publication) Office space Land transportation cost Office operating costs (supplies, utilities, communications) Lump sum/year Lump sum/month Lump sum/month Lump sum/month ,400 2, ,200 31, ,400 38, ,800 28,800 Components Subtotal (1)-(3) 1,839,071 1,360, , ,220 90,200 Contingency (9.4% of JFPR Contribution) 139, ,018 Total Project Cost 1,978,089 1,500, , ,220 90,200 DOE=Department of Energy; EA=executing agency; EE=energy efficiency; FS=feasibility study; LCD=liquid crystal display; MIS=management information system; OH=overhead projector; O&M=operation and maintenance; pax=persons; PIU=project implementation unit; PME=project monitoring and evaluation; RE=renewable energy. 21

25 22 Appendix 3 FUND FLOW ARRANGEMENTS To facilitate day-to-day local expenditures of the JFPR Project, the Asian Development Bank (ADB) will channel the JFPR funds directly to a JFPR imprest account, which will be opened and maintained by the project implementation unit (PIU) in Bacolod City, Negros Occidental, at a bank endorsed by the Department of Energy (DOE) and acceptable to ADB. DOE and DOF will be kept informed by the PIU about all transactions and will receive copies of all financial statements and audit reports. The imprest account, which will be managed by the PIU on the principles of cosignatory arrangement with the chairman of the Project Steering Committee (PSC), will be based initially on the first 6-month activity plan and related budget, and afterwards on the approved annual work plan and budget. ADB will initially channel $100,000 to the imprest account as advance for day-to-day project implementation during the inception period, and will replenish the funds every 3-6 months, based on replenishment requests from the PIU through DOE and in accordance with ADB s statement of expenditures procedure. The replenishment will be based on the fund release criteria to be specified in the project implementation manual (PIM), which will be prepared after project approval, and consistent with the target implementation schedule. The statement of expenditures procedure will apply for all payments and transactions under $10,000 to ensure speedy project implementation. Detailed implementation arrangements, such as the flow, replenishment, and administrative procedures, will be established by ADB and the Government through the JFPR Letter of Agreement, and detailed in the PIM. The schematic fund flow for the Project is shown in Figure A2. Figure A2. Fund Flow Arrangements for JFPR Project Asian Development Bank $1,500,000 Project Imprest Account at Project Implementation Unit Component 1: Component 3: Energy-Based $643,890 $298,442 Project Management Livelihood and Poverty Impact Development and Assessment Energy Efficiency Component 2: Renewable Energy Systems Development and Installation $418,650 $139,018 Contingencies