MANILA, Philippines – The privatization policy in the power industry is not only one of the major reasons why electricity rates in the country is extremely high, but also a policy prescription that aggravates the problem of climate change.

This was according to the Freedom from Debt Coalition in reaction to an on-going activity sponsored by the Asian Development Bank dubbed “Climate and Clean Energy Week 2009.”

Describing the activity as a “mere talk shop and road show” for profit-oriented corporate private sector, the group urged the Bank to stop the policy and instead focus on how to bring electricity rates down and, at the same time, to address climate crisis.

“The ADB relies so much on the private sector initiatives on climate change, while being conscious of the fact that the private sector is also the main contributor to global warming.  It is also public knowledge that private sector’s past and ongoing projects contributing to climate change received funding from the Bank itself,” said FDC advocacy coordinator Job Bordamonte.

FDC cited as an example the Power Sector Reform Program (PSRP) – a program initiated and funded by the ADB, which promotes private sector participation in the power sector.  The program takes away from the State the responsibility of generating, transmitting, and distributing power, thus heavy reliance on private power which produces energy from dirty sources became the main feature of the restructured and privatized power industry in the Philippines since the early 90s.   

Experts say that the power industry is a major contributor to climate change with power plants utilizing fossil fuels such as coal and diesel contributing the highest amount of CO2 emissions to the atmosphere.

FDC said that energy production in the Philippines relies heavily on coal, diesel and natural gas which comprise 64.7 percent of the power generation mix.  Combined renewable sources such as hydro, geothermal, wind and solar power is only 35.27 percent of the mix, or a 29.43% difference.

In addition, during the implementation of the ADB-initiated Electric Power Industry Reform Act (EPIRA), at least four new coal-fired power plants are scheduled to be built in the Visayas region. Further, the two biggest coal-fired power plants in the country located at Pagbilao, Quezon and Masinloc, Zambales, both owned by US-based power companies, are undergoing capacity expansion.  And as of late, a new coal power plant owned by the Korea Electric Power Corporation (KEPCO) and SPC Power Corporation (KSPC) is being constructed in Barangay Colon in Naga, Cebu.  

Other non-renewable energy facilities that are targeted for expansion are the Ilijan natural gas-generating facility in Batangas and the Sual coal facility in Pangasinan.

FDC added that under the power reform program, the three main islands of Luzon, Visayas and Mindanao will be inter-connected.  Centralized grid requires the building of large-scale power plants to respond to an increasing demand in capacities.   

“In order to optimize this kind of highly centralized grid structure, the consumption level (demand) must also be high as well as the dispatch of electricity (supply).  The higher the demand and supply of electricity, the higher the gas emissions from the kind of energy sources being utilized.  A centralized grid also intensifies the use of fuel-based must-run-units (MRUs) as back-up to the main grid,” FDC added.

In stressing these points, FDC is putting forward the following demands in order for climate change to be effectively addressed:

• Redirection of existing dirty energy financing to adaptation and mitigation measures and energy efficiency projects as a form of reparation to the decades of ecological debt owed by the north to the south;

• Financing of renewable energies as one form of restitution for countless years of debt domination that hampered Southern countries capacity to develop alternative technologies and development strategies;

• The sovereign and democratic management and control of funds for mitigation, adaptation and the development of clean, safe and renewable energy; And for the World Bank, ADB and other similar institutions with a horrible track record to be kept from any form of control and involvement over the disposal and use of these funds;

• Stop to all false solutions such as agro-fuels and carbon trading;

• Rejection of all loans, aid and subsidies for fossil fuel extraction, dirty technologies and exploitation of natural resources that violate our national patrimony and the rights of indigenous peoples;

• An end to imposition of all conditionalities (e.g. privatization, liberalization and deregulation) by international financial institutions and northern governments through loans, aid and debt cancellation; and,

• Total and unconditional cancellation and repudiation of debts that have contribute to climate change, and all other illegitimate debts and “obligations” claimed from us by the north and lending institutions.1

The solution to climate change, the group said, cannot be found from the world’s biggest polluters themselves (the corporate private sector) and their long-time financiers (the ADB and IMF-World Bank). -30-

1 Bali Declaration on International Financial Institutions, Debt and Climate Change. 08 December 2007.

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