Guidelines re Power Investments in Bohol
BACKGROUND AND RATIONALE
- Bohol Power Investment Forums: The provincial Goverment, led by Governor Edgar M. Chatto who chairs the Bohol Energy Development Advisory Group (BEDAG), conducted the second Power Investment Forum last 16 March 2015, at Café Dolores, Tagbilaran City. The first forum was held last 10th February in same venue. To date, a total of eleven (11) private power generation/technology companies have presented their credentials and ideas on power investments for Bohol The Bohol Provincial Government Office of the Governor issued “Project Updates Technical Bulletin No. 1-2015” after that first forum. Please to Table 1 below for the list of the 11 companies that have presented in the two power forums.
Table 1: List of 11 companies that presented in the two power forums
|Company||Plant Capacity||Target Year||Technology||Possible Impact on Island Supply|
|Global Business Power Corp.||2 x 40 MW|
2 x 50 MW
|2018||Clean Coal||Long-term supply reliability|
|WESTMIN||2 x 25 MW|
2 x 16 MW
|2018||Clean Coal||Long-term supply reliability|
|CENERTEC (Swiss)||20 MW Modular for Bohol|
Up to 500 MW embedded generation for entire country
|Build modular, clean coal power plants that can be distributed and embedded anywhere in Bohol’s distribution system||Can meet short-term (2016-2018) needs of Bohol|
|Jetro Tech (Taiwanese)||Plant sizes ranging from 200 watts to 1 MW||Various Wind, Solar, and Hydro plant technologies and solutions||Systems can be suited for both on-grid and off-grid systems|
|Sta. Clara Intl. Corp.||Ongoing: 4 MW Hydro plant in Danao||Plant site is within BOHECO 2 area.|
(The original plan was to construct 8 MW but the UP Advisory Group advised to reduce it to 4 MW due to socio and environmental concerns)
|Two Companies||Expressed willingness to join a competitive procurement process, another one said he was impressed with the Governor’s initiative to form the BEDAG|
|At least one company||Noted that all questions he needed to ask in the forum were already answered by the presentation of Engr. Siga of the BEDAG-TWG.|
|COSMO Solar Energy||Solar / Renewable|
|Wildflower Bioenergy, Inc.||2 x 10 MW||20 months to construct||Biomass||BOO/BOT Business Concept|
|Green Earth Enersource||Phase 1: 5 MW|
Phase 2: 5 MW
TOTAL: 10 MW
- Bohol Island Power Development Plan: The Bohol Island Power Development Plan (BIPDP), as approved BEDAG and endorsed by the Bohol Provincial Development Council, has set the following as goals: (1) ensure power supply availability, reliability, and resiliency for the island and; (2) over time, reduce the cost of power to end-use consumers to a reasonable rate. The BIPDP, specifically its Power Supply Plan component, serves as the basic guide for the Provincial Government in promoting and facilitating the entry of new power investments in the island. Consistent with the BIPDP, the Provincial Government is encouraging the entry of power investments to meet the requirements of the island.
- Bohol Investment Policy: Consistent with the Revised Bohol Investment Code of 2014 (Bohol Provincial Ordinance 2014-015, the Provincial Government welcomes energy investments in the province that will promote optimal utilization of local resources and contribute significantly to socio-economic development of the province while ensuring strict compliance with national and local standards for environmental safety and sustainability. Energy has been identified as a priority investment area; qualified entities are therefor entitled to specific tax and non-fiscal incentives. To understand better the provisions of Bohol’s Investment Code, please visit the Bohol Investment Promotion Center website.
- National Government Policy and Guidelines on Energy Investments: The Department of Energy (DOE), which co-chairs the BEDAG, has issued the national policy concerning energy investments. Interested investors in Bohol are advised to refer first to national policy and be guided accordingly in securing appropriate certifications, accreditation, and other qualifications, as starting point. Please refer to the DOE Website for copies of the Energy Investor’s Guidebook and Energy Investment Kit.
TYPES OF POWER INVESTMENTS
The Provincial Government of Bohol, consistent with its long-term socio-economic development goals, the Revised Bohol Investment Code of 2014, and the BIPDP, welcomes any of the following types of private sector investments in energy, specifically power facilities:
- That are primarily intended to install new capacity for meeting the baseload requirement of the DUs starting in 2019;
- That may locate in Bohol with the primary purpose of selling to the grid; and
- That is intended to serve the requirements of off-grid or other specific users in the island province.
Please refer to the Bohol Island Power Development Plan (BIPDP) for information on the projected long-term power requirement of Bohol and the least-cost supply options that are envisioned to meet the goal of reducing electricity cost in Bohol. The prospective investors are advised to refer to the BIPDP to understand better the market for power in Bohol.
Following the three types of power investments that are promoted in Bohol, the following institutional arrangements shall be followed:
- Role of the Provincial LGU
- The Provincial LGU primarily serves as investment facilitator, consistent with the mandate provided in the Revised Bohol Investment Code (BIC) 2014. It is the entry point for all entities intending to invest in Bohol.
- It is necessary that investors have already familiarized themselves and obtained the relevant and necessary certifications, accreditations, and qualifications required at the national level and by the DOE prior to apply as new investor in Bohol.
- Approval by the City/Municipal LGU’s concerned for a business permit is a requirement for the investors to operate a business establishment in Bohol but it does not constitute a guarantee for the investor to obtain a Power Supply Agreement (PSA) with the DUs. Furthermore, neither the Office of the Provincial Governor, the Provincial Development Council nor the Sangguniang Panlalawigan are vested with responsibility and authority to manage, facilitate, or directly intervene in the future Competitive Power Supply Procurement Process (CPSP) of the DUs. Contracting a PSA with the DUs is purely private transaction with the investors.
- As of 6 May 2015, the Bohol Power Investments Coordinating Team has been created by Governor Chatto to ensure the provision of timely action on queries and concerns of prospective energy investors. The Team, headed by the Governor, includes the following members: 1.) Provincial Planning and Development Coordinator; 2.) Provincial Administrator; 3.) Provincial Legal Officer; 4.) BEDAG-TWG Head; and 5.) BIPC Head. The Team is tasked with preparing the “Detailed Guidelines for Bohol Power Investments” and responding to all queries and concerns of prospective power investors.
- To pump-prime the task of this Team in coming up with the detailed guidelines, the power companies that attended the 2 Power Forums and other interested prospective energy/power investors are enjoined to formally submit to the Bohol Power Investments Coordination Team, care of the Office of the Governor an Information Packet indicating their planned investment in Bohol. See Item E.1 for instructions. Please see Table 2 below for information to be provided.
- The Information must be sent, no lather than end of June, to:
The Bohol Power Investments Coordination Team
Office of the Provincial Governor
Bohol Governor’s Mansion
CPG North Avenue, Tagbilaran City
- The Bohol Power Investments Coordination Team will forward the same information to the 3 DUs for their reference in inviting participants to the future Joint CPSP.
Table 2: Information Packet to be submitted by prospective investor to the Provincial LGU
|Nature of Business|
|Name of Company Owner|
|Telephone & Mobile numbers|
|Relevant track record in power development||Please specify the following for each project:|
|Planned Investment(s) in Bohol||Please specify the following:|
- Role of the Distribution Utilities
- Consistent with the BIPDP, the 3 DUs intend to enter into long-term power supply agreements (PSA) with one or more generation companies. The planned Joint Competitive Power Supply Procurement (CPSP) is expected to attract prospective investors or generation companies (GenCos) that will competitively bid for the right to supply Bohol’s long-term baseload requirements for 2019 to 2039.
- GenCos that are planning to build their power facilities and secure a PSA in Bohol must participate in the CPSP process that will jointly be conducted by the 3 DUs.
- As of 6 May 2015, the 3 DUs: BOHECO 1, BOHECO 2, and Bohol Linght Company, Inc., have began preparing for this future Joint CPSP. The 3 DUs are forming an “aggregation entity” and have begun conceptualizing the parameters of their joint CPSP. The group will announce the particulars of the future CPSP in a subsequent Transaction Information Memorandum that will be issued start of year 2016. See below the Indicative Process Flow of the Joint CPSP by the 3 DUs.
- All potential investors that submit their credentials (Information Packet) to the Bohol Power Investments Coordination Team are assured to be invited to the future CPSP. The BEDAG, thought he Office of the Governor, shall issue a subsequent bulletin to update the interested parties on the Joint CPSP.
Indicative Process Flow of the Bohol Distribution Utilities on their Prospective Joint Competitive Power Supply Procurement for Bohol’s Long-term (2019-2039) Baseload Requirements
June to December 2015
- Formal Aggregation of the 3DUs
- Least-Cost Power Supply Planning
- Market Assessment
- Design of the Transaction / Competitive Power Supply Procurement Process
- Organization of Joint CPSP Board, BAC and TWG
- Preparation of the Transaction Documents (Information Memorandum, Due Diligence Data, Instructions to Bidders and key Contract Terms
January to June 2016
- Launch of the Transaction — Issuance of the Transaction Memorandum
- Pre-Bid Conferences and Bid Bulletins
- Bidding Coference
- Evaluation of Bids
- Negotiation on Risk Mitigation and Implementation Procedures
- Drafting of Power Supply Contracts
- Contract Signing
July to December 2016
- Regulatory Filings
ENGR. EMIGDIO ACIERTO
Chair, Technical Working Group of BEDAG
ATTY. JOHN TITUS VISTAL
Provincial Planning and Development Coordinator
Dated: 7 May 2015