DOE taps Landbank for creation of trust accounts
By Lenie Lectura – November 5, 2024
from Business Mirror
THE Department of Energy (DOE) has tapped the Landbank of the Philippines (LBP) to help assist the beneficiaries of Energy Regulations 1-94 (ER 1-94) program.
Through the ER 1-94 Program, power generation companies contribute one centavo per kilowatt-hour of generated power to support the communities hosting their projects. In this way, communities can readily access resources to drive social, economic, and environmental progress in their areas.
However, the DOE said numerous barangays, as well as indigenous peoples or indigenous cultural communities in remote areas—particularly those located near small hydropower plants and newly established generation facilities—have yet to establish the required trust accounts under the ER 1-94 Program.
“Setting up a trust account is a crucial step for these host communities to access and utilize these funds. Without an operational trust account, these communities may miss out on valuable support for local projects that could enhance infrastructure, education, health, and livelihood opportunities,” DOE Undersecretary Christina Guevara said.
The partnership between the agency the LBP was formalized via a Memorandum of Understanding (MOU) signed by Guevara and LBP Senior Vice President Althon C. Ferolino. The MOU establishes a dedicated trust account to streamline access by host beneficiaries of energy projects to essential funds.
Under the MOU, LBP is committed to waive service charges for accounts falling below the maintaining balance. This special feature underscores their commitment to ensuring that financial services are equitable and accessible to all, particularly those communities who may face challenges in maintaining a minimum balance.
The DOE emphasized the importance of establishing these trust accounts to enable communities to fully benefit from the ER 1-94 Program. “With LBP as our partner, assisting local leaders and community representatives in understanding the account setup process and requirements is essential to ensure that they can manage and use the funds effectively for sustainable development and social welfare,” Guevara added.
The LBP is also committed to disseminate information about this special arrangement across their 607 branches and branch-lite units nationwide, ensuring that communities are well-informed and are able to experience the benefits of this partnerships.
The DOE aims to further strengthen partnerships with government and private organizations to better serve the beneficiaries of ER 1-94,. A key focus is addressing the banking challenges these beneficiaries face, particularly in opening and maintaining deposit accounts required by the Program. “With LBP’s extensive reach, we are confident that this initiative will lead to a more efficient and effective use of our ER 1-94 funds,” added the DOE official.
Distribution Utilities (DUs), Energy Centers (ECs) and local communities hosting generation projects can benefit from three interest-bearing current accounts under ER 1-94. These accounts include the Development and Livelihood Fund and the Reforestation, Watershed Management, Health, and Environment Enhancement Fund, from which local communities can access 25 percent each from the one-centavo per kilowatt-hour of generated power. Additionally, the Electrification Fund allows DUs and ECs to access the remaining 50 percent.
