A group of lenders have raised US$161mn for 70MW-worth of biopower energy projects in the Philippines.
The lenders are ThomasLloyd, a cleantech infrastructure fund, the IFC, WBE International Green Energy, the Canadian government and Bronzeoak Philippines, a clean energy developer.
The project portfolio includes three separate plants: San Carlos Biopower, South Negros Biopower and North Negros Biopower, all of which are located on Negros Island. The plants will convert sugarcane waste to electricity, using circulating fluidised bed boiler technology, which processes sugarcane that would previously have been burnt in the fields, generating further emissions.
The financial sponsor is ThomasLloyd, which has been principally working on energy generation on Negros Island for the past five years.
Thomas Coveney, head of project finance, tells GTR that the company financed the first renewable energy project under the government’s 2008 Renewable Energy Act, the San Carlos Solar Energy plant which was inaugurated in 2014.
He says that with the “noticeable lack of enthusiasm from the commercial banks in Asia to lend to the development and construction phases of renewable energy”, funds such as ThomasLloyd are reliant on development finance institutions such as the IFC for refinancing and co-financing opportunities.
The case for biopower, Coveney says, is strong particularly in developing parts of the world. Using agricultural waste to create energy gives farmers in rural areas both income and secure energy supply and the “go-ahead vision” in the Philippines is allowing the sector to flourish. Coveney encourages other Asian governments to follow suit.
He explains the significance of this type of energy to the Philippines: “When we first visited the island in 2010, it produced very little of its own energy. Since our first project, there is now around 300MW of solar power alone on the island, plus more wind in construction. Add to that the base load of our 70MW biomass plants, and you see a significant improvement both in energy mix and energy security for Negros.
“There are now early discussions on the possibility of expanding the undersea cable, so that the island could become a net exporter into the wider Visayas grid. Beyond this, there are the micro-economic benefits to the local farmers. Our plants will use the sugarcane trash to turn into power.
“In buying this trash from the farmers, we will give them a whole new income stream, and at the same time remove the need for them to burn this waste product in the field. Our projects will also help clean up the air. Pollution from agricultural fires is a major problem throughout Asia.”