The Philippines and the United States signed a $60-million (roughly P3.68 billion) grant agreement to mobilize more investments in the energy sector and make electricity affordable and reliable.
The Department of Finance (DOF) said Finance Secretary Frederick D. Go and US Ambassador to the Philippines Lee Lipton signed the Millennium Challenge Corporation (MCC) Threshold Program Grant Agreement (TPGA) on Thursday.
The grant will bankroll a four-year-and-nine-month Threshold Program that will address policy and institutional gaps in the energy sector and strengthen the country’s eligibility for the MCC Compact, a larger grant program that finances major economic development projects and policy reforms, the DOF said in a statement.
The program will support two projects, particularly reforms under the Energy Development Governance Efficiency (Edge) Project and the American Investment Mechanism (Aim) Project.
The Edge Project will be implemented by the Department of Energy, Energy Regulatory Commission, National Electrification Administration and National Power Corp. to create ‘a more reliable, efficient and responsive energy system.’
One component, the Permitting and Approvals Reform for Efficiency, will speed up government approvals and reduce transaction costs associated with energy projects.
The other, the Smart Utilities for Regional Growth in Energy component, will support electric cooperatives through power-grid digitalization and secure financing for strategic infrastructure investments.
The reforms are expected to facilitate faster development of energy projects, reduce power disruptions and improve the affordability of electricity for consumers and businesses, the DOF said.
Meanwhile, the Aim Project will receive funding to catalyze private sector investment and support coordinated investment with the US International Development Finance Corporation.
It will also prepare high-impact projects for investment by funding feasibility studies, project design, market assessments and other support needed to make projects ready for financing.
‘We extend our gratitude to the US government for approving a 60-million-US dollar grant under the MCC Threshold Program. This support will help us address key policy and institutional gaps to strengthen the foundations of our energy sector,’ Finance Secretary Frederick D. Go said.
The Philippines is one of a limited number of countries selected to receive financial aid under the MCC Threshold Program.
The MCC is an independent US Government international development agency that provides time-limited grants with the goal of promoting economic growth, reducing poverty and strengthening institutions.