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  • Electricity/Power Grid

Zamboanga suffers from lack of power supply

7 April 2019

 – 

  • Philippines

ZAMBOANGA CITY: Exasperated by the regular brownouts, Mayor Maria Isabelle Salazar demanded the Zamboanga City Electric Cooperative (Zamcelco) to pay up its overdue accounts to electricity supplier Western Mindanao Power Corp. (WMPC) to resolve the daily power outages.

WMPC cut off the supply of electricity to Zamcelco — now under the management of Crown Investments Holdings Inc. and Desco Inc. — after it refused to pay its overdue account of P235 million.

Crown Investments Holdings Inc. and Desco Inc. took over Zamcelco in January this year after bailing out the heavily indebted and poorly managed electric cooperative for P2.5 billion.

Zamcelco is claiming that WMPC overbilled the electric cooperative since 2015 by P440 million.

WMPC is being run by Alto Power Management Corp., a partnership between Alsons Consolidated Resources Inc. through Conal Holdings Corp. and Toyota Tshusho Corp. of Japan. It also operates diesel plants of the Mapalad Power Corp. in Iligan City and the Southern Philippines Power Corp. in Sarangani province.

It was unknown whether former Zamcelco officials had knowledge of the overbilling or not, but many executives had been sacked in the past years by the National Electrification Administration on corruption allegations. None had been criminally charged.

Now both Zamcelco and WMPC are locked in a legal battle, with Zamboanga suffering the brunt of the business rift between the two companies. Zamcelco also stopped buying electricity from WMPC and is now scouting for new suppliers. It also acquired more expensive diesel-powered generators to be able to supply Zamboanga’s power demand of at least 80 megawatts.

Salazar said rotational power outages, which began in February, have already affected the local economy with many business establishments spending more on fuel to run their generators for hours on a daily basis.

The lack of household electricity also put a heavy burden on residents and many of them rely on Zamcelco for power supply because they cannot afford to buy their own generators.

Letter to Zamcelco

Salazar had written a strongly-worded letter to Zamcelco demanding it pays WMPC and it restores the normal electricity supply in Zamboanga. A copy of the April 1, 2019 letter addressed to lawyer Jomar Castillo was also posted on Salazar’s Facebook page that reads: “This has reference to the current power situation in our city. As you know, Zamboanga City plays a key role not only in trade and commerce, but in national security as well. Residents and businesses are complaining of longer and more frequent outages since February 4 that adversely affected our local economy prompting me to write this demand letter.”

“While we support the Investment Management Contract and laud your commitment to pump in P2.5 billion into Zamcelco, we can no longer tolerate the rotating blackouts. Whether there is legal basis to withhold payment to WMPC must be settled in the proper courts of law. In the meantime, our people cannot suffer further. We have been paying our monthly bills and we see no reason why we are made to suffer the consequences of the electric cooperative’s refusal to pay WMPC. For Zamboanga City that is hub of trade and commerce and also hosts to the Western Mindanao Command, the stakes are too high if power outages will continue.”

In a press statement, Salazar also said electric consumers were demanding Zamcelco to provide them with proper utility services. “We have been appealing many times to Zamcelco to the extent that the local government even held talks with its representatives and WMPC for them to settle their legal problems because every­body was affected by this inadequate supply of electricity. We cannot go on like this and this problem must be resolved quickly,” Salazar said.

  • Energy Efficiency

All streetlights to be LED lamps starting September

7 April 2019

 – 

  • Malaysia

KUALA LUMPUR: All roads nationwide will be lit with LED lamps, instead of the traditional light bulbs, in a move to save energy by as much as 50%.

Right now, about 80% of streetlamps in Malaysia use other forms of lighting apart from LED (light-emitting diodes), which are known to be more energy-efficient and environmentally friendly than incandescent bulbs.

The plan to introduce LED street lighting will be rolled out in stages beginning September, said Housing and Local Government Minister Zuraida Kamaruddin (pic).

“We can save about 50% from current energy expenses with this move.

“The ministry will also look into having illuminated signages on shops and buildings changed to LED lighting as well,” she told Sunday Star.

She said not only will this move be more power-saving, it will also create a more beautiful and attractive urban landscape for the people.

“We will conduct a pilot project of this in my constituency in Ampang first.

“The tender process to get contractors to conduct this project will be completed around June.

“We will then carry out the pilot project for three months.

“If all goes according to plan, we can expect to implement this on a nationwide basis in September, in stages,” she said.

Zuraida said the ministry was also looking into installing CCTV cameras at hotspots to deter crime and to catch those who dump rubbish illegally as well.

“I will also start this in Ampang first before extending it to the whole country.

“Aside from curbing crime with these CCTVs, we also want to stop people, be they Malaysians or foreigners, from littering,” she said.

On another matter, Zuraida said her ministry will push for more fire stations to be set up nationwide to speed up response time for emergencies.

“In view of the coming Budget 2020 and 12th Malaysia Plan, we are planning to incorporate measures to build more fire stations.

“There are currently four classes of fire stations, namely Classes A, B, C and D based on various criteria.

“I am proposing to create a new category, Class E.

“This category is for smaller scale fire stations to be set up on islands and remote areas including near longhouses in Sarawak,” she said.

Such stations will be smaller with less personnel, but adequately equipped to address emergencies.

“These smaller stations will be supported by larger stations within the area which can be called for back up.

“But while waiting for the reinforcements, personnel from the Class E stations will be able to be despatched immediately to provide first responder services,” Zuraida added.

It was reported that there are 258 fire stations in Malaysia.

  • Renewables

Renewable energy: the future of power for Vietnam

7 April 2019

 – 

  • Vietnam

Vietnam could meet its long-term energy demands by adding renewable energy sources and cutting-edge battery storage technologies to its arsenal of solutions, experts said at a two-day international conference on renewable energy that ended on April 4 in HCM City.

Speaking on the sidelines of the conference, Nguyen Tam Tien, CEO of Trung Nam Group, said that renewable energy generation has already significantly increased. “Renewable energy, especially solar and wind power, will be the future of Vietnam’s long-term energy strategy,” he said.

Mai Van Trung, business development director at SolarBK, said the country has favourable conditions to develop solar energy and that commercial and industrial solar PV rooftop applications have great development potential.

Rooftop solar panels have also become more affordable for homeowners and communities, he said.

Samresh Kumar, managing director of Principal Investment at VinaCapital, said solar rooftop power presents an effective solution which provides a commercially viable option, especially for the commercial and industrial segments.

Solar power leverages existing infrastructure and monetises idle assets without requiring additional land, and it is also efficient because power is produced only where it is needed and thus frees up the grid, he noted.

John Rockhold, head of the Power and Energy Sub-working Group under the Vietnam Business Forum, said rooftop solar panels must be encouraged to reduce pressure on the national grid, while modest annual price increases and a road map for efficiency energy are badly needed.

Huge investment

Vietnam has a great opportunity to reach its energy security goals by attracting local and foreign investment, according to Rockhold.

New technologies are creating opportunity for the renewable energy sector, he said, adding that such technologies could help lower the cost of equipment for solar and wind energy.

Vietnam will require around 10 billion USD annually between now and 2030 to meet the growing demand of the energy sector, experts said.

With such high capital requirements, the government has allowed 100 percent foreign ownership of Vietnamese companies in the energy sector.

Foreign investors can choose among permitted investment forms such as 100 percent foreign-invested company, joint ventures or public-private partnership (PPP).

FDI and domestic investment from the private sector could include investment in batteries and other storage methods, which would help stabilise supply and extend the availability of solar and wind power sources.

By storing renewable energy and keeping supply high, prices for solar and wind power could be lowered.

With low feed-in-tariffs (FiT) and high production costs, PPPs are the most effective means of entering the market to minimise risks. The PPP term is usually 20 years from the commercial operation date.

Government efforts

With 66 percent of rural inhabitants, Vietnam is scaling up its efforts to bring electricity to the entire population, whether on or off-grid, increasing electrification rates and preparing the country for growth.

Vietnam is one of the most efficient power markets in Southeast Asia, driven by low-cost resources such as hydro and coal. The country has achieved around 99 percent electrification with relatively low cost in comparison to neighbouring countries.

With electricity demand projected to increase by eight per cent annually until 2025, Vietnam aims to develop renewable energy sources to ensure energy security and address growing power demand.

Hydropower currently holds the largest share among all renewable energy sources, followed by biomass and wind. Solar energy, biogas, and waste-to-energy technologies are picking up slowly while geothermal energy and tidal energy are at a very early stage.

Renewables could become Vietnam’s lowest-cost option to meet its energy needs.

In recent years the Government has developed initiatives to boost renewable energy, especially solar and wind power. Tax incentives include preferential corporate income tax rate of 10 percent for 15 years, corporate income tax exemption for four years, and a reduction of 50 percent for the following nine years.

Other incentives include preferential credit loans, land use tax exemption, and land rental exemption.

To ensure consistent returns for investors, the government has also approved electricity prices for on-grid renewable energy, including standardised power purchase contracts (20 years) for each renewable power type.

EVN, the sole buyer of electricity in Vietnam, has also been mandated to prioritise renewable energy in grid connection, dispatch, and purchasing electricity at approved tariffs.

From now until 2030, Vietnam’s economy is forecast to grow at a high rate of between 6.5 and 7.5 percent per year.

The conference was held during the two-day Solar Show Vietnam 2019, Power & Electricity Show Vietnam, Energy Storage Show Vietnam, and Wind Show Vietnam, which attracted hundreds of policymakers, regulators, investors and financiers from Vietnam, Asia-Pacific region and beyond.

The trade shows were also attended by power producers, project developers, renewable energy vendors, and business owners and land developers.-VNS/VNA

  • Bioenergy

$500-M waste-to-energy plant proposed in Bataan

6 April 2019

 – 

  • Philippines

BALANGA CITY, Bataan — The provincial government announced Friday that a British banker has presented a proposal to build a 100-megawatt (MGW) power plant using solid wastes with funding of USD500 million.

Vice Governor Crisanta Garcia said documentation was already ongoing for the proponent’s desire to set up the plant at the Freeport Area of Bataan in Mariveles town.

“It will be the first such technology converting solid wastes to energy in Bataan,” she said.

Banker David Wood, also the chief executive officer (CEO) of cocopower and who will fund the project, said it will be under the public-private partnership (PPP) but with almost no cost for the provincial government.

Mar Supnad, a journalist who introduced the investors to provincial officials, said the provincial government will only provide 15 hectares of land as counterpart.

He said that funding is ready and once documentation is finished, the proponents wanted the construction to start this May.

Wood said the project, under the state of the art Australian technology, will be the first in Bataan and in the Philippines, which will process wastes to energy.

“It is green energy to replace coal. The technology will solve environmental problems,” the foreign banker said.

He said that for the first phase of the project of 50-MGW, the operation needs 1,500 tons of garbage a day.

If the garbage supply will not be enough, the company will ask farmers to plant Napier grass as fuel for the plant that will provide additional income for the residents, Supnad said.

“It will have a positive effect on the environment for it will produce clean power,” Wood said.

He said there will be no more landfill and there will be close to zero harmful emission and a smokeless fuel.

Edgardo Rivera, CEO of Disruptive Corp. and who will provide the technology and the machinery, said they will strictly comply with the country’s Solid Waste Management Act.

They also thanked Governor Albert Garcia and the vice-governor for the accommodation. (PNA)

  • Electricity/Power Grid

Ministry mulls direct power sale

6 April 2019

 – 

  • Vietnam

Hanoi (VNA) – The Ministry of Industry and Trade (MoIT) is considering allowing companies that use a lot of power to buy electricity directly from power plants.

Speaking at a press meeting in Hanoi on April 5, Nguyen Anh Tuan, director of the Electricity Regulatory Authority of Vietnam (ERAV), said they have been working with international consultancy firms to study the mechanism.

“The pilot implementation aims to establish the competitive retail electricity market in 2021,” Tuan said.

The ministry launched the competitive power generation market in 2012 and the competitive wholesale power market at the beginning of this year.
Since then, 10 percent of the country’s total power capacity has been sold to power generation firms directly.

From the beginning of this year, in addition to Vietnam Electricity (EVN), five other power corporations have been able to buy electricity from power plants. The ministry plans to gradually increase the number of such corporations in the competitive wholesale power market.

The MoIT said after three months of running a competitive wholesale power market, the difficulties are mainly related to taxes and infrastructure as the number of transactions in the market has sharply increased.

The ministry has to resolve issues of operation at power plants to ensure safe and stable operation.

Tuan said they will continue to instruct agencies to complete infrastructure and hold training courses on the power market.

“The ministry is expected to review the operation of the competitive wholesale electricity market this month to collect difficulties to have timely solutions to resolve the issues,” he added.

Renewable power plants have not participated in the competitive market as only those with capacity of more than 30MW can join the market.

The operation of the competitive wholesale electricity market from the beginning of the year has brought good opportunities to power buyers and sellers as well as customers.

The ministry has studied building a mechanism to encourage renewable energy plants participate in the market to increase nationwide power supply.-VNA

  • Others

Monetary Authority of Singapore launches Sustainability Bond Grant Scheme

5 April 2019

 – 

  • Singapore

On 26 February 2019 the Monetary Authority of Singapore (MAS) announced the expansion of its Green Bond Grant Scheme to include social and sustainability bonds, and renamed the framework the Sustainability Bond Grant Scheme.

Overview

In response to feedback from market participants on the Green Bond Grant Scheme introduced in March 2017 (the Original Scheme) and in furtherance of Singapore’s drive to be the epicentre of Asia’s green, social and sustainability bond markets, the MAS has expanded the scope of the Original Scheme to include social and sustainability bonds that meet prescribed qualifying requirements (the New Scheme), and relaxed the eligibility criteria concerning minimum tenor and issue size.

As reported in our 2018 Spring edition of Debt Capital Markets Global Insights, the purpose of the Original Scheme was to assist certain categories of issuers (qualifying issuers) with the costs incurred in obtaining an external review – or rating of qualifying bonds based on internationally recognised standards and frameworks (eligible expenses). The New Scheme covers the same types of eligible expenses in respect of qualifying social and sustainability bonds.

Qualifying issuers

The categories of qualifying issuers under the New Scheme remain the same: All companies and financial institutions, whether onshore or offshore, qualify for the grant. Sovereign issuers are excluded.

Eligibility criteria

To qualify for the grant under the New Scheme, the qualifying issuer’s green, social or sustainability bonds must be:

  1. listed on the Singapore Exchange (SGX);
  2. a “Qualifying Debt Security” for Singapore tax purposes[1];
  3. substantially arranged by a Financial Sector Incentive[2] (FSI) company or companies in Singapore where more than half of the gross revenue from arranging the issue is attributable to the FSI company/companies; and
  4. verified by an external reviewer as holding such green, social or sustainable status based on internationally-recognised standards and frameworks such as[3]:
  • ICMA / ASEAN Geen Bond Principles
  • ICMA / ASEAN Social Bond Principles
  • ICMA / ASEAN Sustainability Bond Guidelines and Standards
  • Climate Bonds Standards

Enhanced eligibility criteria: Minimum tenor and principal amount

Eligibility criteria concerning minimum tenor and minimum principal amount remain applicable under the New Scheme, but have been significantly relaxed to enable qualifying issuers, including green bond issuers, to gain access to the grant more easily.

i. Tenor: The requirement for the bonds to have a minimum non-redeemable tenor of three years has been reduced to just a year under the New Scheme.
ii. Principal Amount: The requirement for the bonds to have a minimum principal amount of S$200 million[4] has been retained, but the New Scheme also permits an issue size starting from S$20 million[4] to qualify for the grant provided it is a drawdown under a debt issuance programme of at least S$200 million[4].
These enhanced eligibility criteria on minimum tenor and principal amount should allow issuers with green, social or sustainability projects that have variable funding needs spread over a period of time to qualify for the grant. Under the Original Scheme, each issuance was required to have minimum non-redeemable tenor of at least three years and a minimum principal amount of S$200 million, which effectively excluded issuers seeking to pursue projects that are designed to be rolled out in smaller phases. Now, large sophisticated issuers as well as smaller sized issuers that do not have the financial strength or a project of sufficient scale to issue a S$200 million bond in the first instance can access the grant by establishing a debt issuance programme which should provide the additional benefit of flexibility, enabling the qualifying issuer to access the capital markets as its funding needs dictate and/or to take advantage of attractive pricing windows.
Maximum amount of grant under the New Scheme
The grant under the New Scheme is subject to the same cap of the lower of 100 per cent  of actual eligible expenses and S$100,000.
Where the qualifying issuer has a debt issuance programme size of at least S$200million and an initial issuance of at least S$20million in principal amount, subsequent eligible expenses attributable to issuance(s) under the same debt issuance programme will also be eligible provided:
i. the subsequent issuance(s) takes place within the validity period of the New Scheme; and

ii. the total amount claimed by the qualifying issuer, including for the initial principal amount issued, does not exceed the cap.

Qualifying issuers should note that it remains a requirement under the New Scheme that more than half of the eligible expenses be attributable to Singapore-based external review service providers. Diligent enquiries about staffing and work allocation matters should, therefore, be made with service providers at the outside and throughout the life of the transaction, if necessary, to ensure that the Singapore nexus can clearly be demonstrated to the MAS.

Validity period of the New Scheme

The New Scheme is valid from 1 January 2019 to 31 May 2023.

Application process

Similar to the Original Scheme for green bonds, an application for a grant under the New Scheme may only be made after the qualifying bonds have been issued. Qualifying issuers should note the following pre and post-issuance requirements, and seek advice from their external advisers prior to any proposed green, social or sustainability bond issuance to ensure that the proposed issuance will satisfy the eligibility criteria under the New Scheme.

i. Pre-issuance: A qualifying issuer must appoint a lead arranging bank to carry out appropriate due diligence to verify that the proposed issuance will meet the criteria set out under the New Scheme. The appointed lead arranging bank must be a FSI company in Singapore.
ii. Post-issuance: No later than three months after the issuance date, the appointed lead arranging bank is required to submit a completed application form to the MAS on behalf of the qualifying issuer, together with the requisite invoices for the reimbursement of eligible expenses.
Summary
The relaxation of the eligibility criteria under the New Scheme demonstrates the MAS’ understanding of issuers’ funding needs and constraints in the green, social and sustainability bond market, and is expected to encourage more issuances over the next few years. Potential issuers who consider transaction costs associated with external reviews as limiting the attractiveness of such issuances should assess their eligibility for the grant under the New Scheme together with the benefits and flexibilities of issuing bonds under a debt issuance programme. As the grant is available to both onshore and offshore issuers and SGX is typically recognised as an acceptable listing venue by international debt investors, the New Scheme looks set to boost Singapore’s competitiveness in the market for this growing asset class.
[1]       Section 13(16), Income Tax Act, Chapter 134 of Singapore; Section 4, Income Tax (Qualifying Debt Securities) Regulations
[2]       Section 13(16), Income Tax Act, Chapter 134 of Singapore
[3]       National standards or guidelines remain excluded under the New Scheme.
[4]       Or its equivalent in other currencies

[View source.]

  • Others

IP regime, connectivity to keep Singapore industries competitive in low-carbon future: Chan Chun Sing

5 April 2019

 – 

  • Singapore

SINGAPORE – Singapore will work with its industries as it moves to meet standards of a low-carbon future, while remaining competitive with its strong connectivity and intellectual property (IP) regime, said Trade and Industry Minister Chan Chun Sing on Friday (April 5).

Describing the need to constrain emissions as “a new mountain to climb”, Mr Chan noted the importance of working with companies, such as energy giant ExxonMobil, that invest in technology for building more sustainable products.

“Today, the world is much more competitive for the next investor dollar. Our job is to make sure that we continue to provide that progressive environment, not just in… the kind of relationship that we have (with companies), but also in the kind of rules that we can have,” he added.

Speaking at the official opening of ExxonMobil’s butyl rubber and resin plants on Jurong Island, Mr Chan said such rules include a strong IP regime as well as regulations allowing companies to have data-enabled technologies.

ExxonMobil’s new plants are part of a multi-billion-dollar expansion project, and its products go some way in reducing emissions.

The plants also add 140 jobs – such as engineers and technicians – to its workforce of over 4,000 in Singapore. Another 100 logistic jobs were also created at its packaging and warehouse facility on-site, run by a Singapore-based company.

The energy giant’s regional growth plans include increasing the number of such facilities, said Ms Karen McKee, president of ExxonMobil Chemical Company. She added that there is growing demand for synthetic rubber and adhesives here.

Ms McKee also said that about half of the world’s economic growth between now and 2040 will occur in this region.

Global demand for the chemical industry has doubled since 2000 and this is expected to grow about 4 per cent annually for the next 20 to 30 years, faster than overall energy demand growth.

“Singapore is a critical component of that story, not only as an energy and manufacturing hub, but also as a centre for technology and for skills development,” she added.

As a result of dynamics in the region, ExxonMobil has embarked on an “aggressive growth plan” to double its earnings by 2025, she added, pointing to the two new plants as key moves.

One of the plants produces up to 90,000 tonnes of Escorez hydrogenated hydrocarbon resins a year, aimed at meeting long-term demand growth for hot-melt adhesives used in packaging and diapers. It started operations in December 2017.

The second plant, which is expected to start commercial production in the second half of the year, produces up to 140,000 tonnes of premium halobutyl rubber a year – a substance used by tyre manufacturers to maintain inflation.

Keeping tyres properly inflated can help to save about a billion gallons of fuel, reducing carbon dioxide emissions by eight million tonnes a year, said ExxonMobil.

The official opening on Friday follows a series of expansion announcements by the company, which said on Tuesday that it will take on another multi-billion-dollar project to grow its facilities on Jurong Island.

This will raise its output of cleaner fuel amid more stringent environmental rules for the shipping industry from 2020 – a shift that shipping and oil refining industries have been scrambling to prepare for.

In an opening speech, ExxonMobil Asia Pacific chairman and managing director Gan Seow Kee said the company invests about $1 billion a year in research and development worldwide.

He noted that the plants use new technologies. For example, their warehouse uses a robotic arm that can pack a 34kg butyl bale every seven seconds, and driverless forklifts that automate product movements in the warehouse.

  • Others

CDL snags $500m in green loans for new property developments

5 April 2019

 – 

  • Singapore

SINGAPORE – City Developments Limited (CDL) has bagged $500 million in two green loans, marking the first time such financing will be used in Singapore for new property developments, the mainboard-listed developer said on Friday (April 5).

A three-year green loan of $400 million will be provided by DBS Bank, which is also the adviser for the loan.

Meanwhile, a two-year green loan of $100 million is being extended by HSBC, which is structuring adviser for the loan.

CDL noted that these loans will allow the group to finance new green developments in Singapore and abroad.

“The green loans will be used to finance eligible green development projects as defined in the CDL green finance framework, which was developed to demonstrate how CDL and its group entities intend to fund projects that will deliver environmental benefits to support the group’s business strategy and vision,” the company said.

CDL’s green loans come after its inaugural green bond issuance in 2017. The green bond raised $100 million, which was allocated towards initiatives to enhance energy and water efficiency at CDL’s flagship office building in Republic Plaza.

Said CDL chief executive officer Sherman Kwek: “Green financing plays a pivotal role in channelling capital to build greener and more climate-friendly infrastructure. CDL’s inaugural green bond in 2017 and our new green loans have enabled us to tap investors and banks that are supportive of our sustainability best practices.

“With the global shift to a low-carbon economy, CDL will continue to explore sustainable financing to develop more green buildings that not only bring economic savings but also benefit occupants and the environment.”

In a sustainability report released by CDL this year, the group reported savings of more than $24 million due to energy-efficient initiatives and retrofitting implemented at eight of its office buildings from 2012 to 2018.

As at 4.15pm on Friday, shares in CDL were trading at $9.32 apiece, up 0.2 per cent, or two cents.

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