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Waste-to-energy projects at LGUs seen as ‘next wave’ by PPP center

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prebid conference QC WTE
PPP CENTER

LOCAL GOVERNMENT interest in waste-to-energy (WTE) projects is an emerging opportunity for potential power investors, the Public-Private Partnership (PPP) Center said.

PPP Center Executive Director Ferdinand A. Pecson described WTEs as the “next wave of PPPs,” due to the depletion of the country’s indigenous energy sources and persistent solid waste issues.

“Energy is one of the pressing needs of the country, and also we have environmental problems like waste, which is also an important problem to solve. So we’re talking of a solution that addresses both the need for energy — renewable energy — and addressing sanitary, environmental (concerns). So cities have such problems, all cities, all local governments are looking for solutions to address this and already,” Mr. Pecson said yesterday on the sidelines of the China-Philippines Infrastructure Investment Conference in Manila.

The PPP Center is currently readying the Swiss challenge for a P22-billion WTE facility of the Quezon City government, where the proponent is a consortium of Metro Pacific Investments Corp. (MPIC), Covanta Energy, LLC, and Macquarie Group Ltd. Interested bidders can submit counterproposals until Jan. 31, 2019, and the PPP Center will select a winning proponent on Feb. 28.

The facility will have the capacity to convert up to 3,000 metric tons a day of municipal waste to 42 megawatts of output, which can power around 60,000 to 90,000 homes.

Mr. Pecson said that there is heightened interest from businesses as about three to four firms bought bid documents for the Swiss challenge.

“That’s something that many are interested in.”

He added that Cebu and Naga City in Camarines Sur are also considering similar projects.

“The government of Quezon City is a trailblazer and we expect others to follow. Cebu is pursuing this. I was talking to the planning officer of Naga City in Camarines Sur, and they said they also wanted to pursue this. This is worth exploring,” he said.

The first waste-to-energy project of the Philippines is currently being implemented by the Puerto Princesa local government, and WTE developer AustWorks Corp., worth P2.1 billion.

Mr. Pecson said that the PPP Center is looking to bundle smaller projects by LGUs, to make them more attractive for investors.

“The PPP Center needs to find those LGUs so we can bundle together, so we can increase the scale or even the scope of the project, to make these LGU projects bankable. The bigger issue is the scale is just too small,” he said, noting that the Baggao Water Supply Project and the Pampanga Bulk Water Supply Project are worth less than P100 million.

“Small projects find it difficult to attract many investors… But (the PPP Center) doe not shy away from even small projects. The economic benefit to the locality is so large that we can’t neglect the segment,” Mr. Pecson said.

He also said that there is an infrastructure gap in the sanitation industry.

“Sanitation is very much left behind. We just closed Boracay primarily because of sanitation issues. So this is the kind of infrastructure that is very badly needed, and that the government should provide support for,” Mr. Pecson said.

“They are usually not viable therefore the government has to step in order to make this financially viable for investment so we’re working on these issues,” he added.

In a bid to speed up implementation, the government has shifted away from pure-PPP schemes on its flagship infrastructure projects in favor of a hybrid type of PPP where projects are initially funded using government funds or Official Development Assistance, with the PPP component reserved for operations and maintenance. However, PPP proposals are still welcomed as long as they introduce new technology and do not seek guarantees from the government. — Elijah Joseph C. Tubayan