Climargy partners with UN fund for energy efficiency projects
By Myrna M. Velasco – August 29, 2022, 3:00 PM
from Manila Bulletin
Filipino-led Climargy Inc. has sealed a partnership with the United Nations Office for Project Services (UNOPS) on its pursuit of energy efficiency projects – and that will primarily cover the initial requirement of undertaking investment-grade energy audits (IGAs) for prospective commercial and industrial (C&I) clients.
In a statement to the media, Climargy noted that its collaboration with the UN fund had been anchored on a grant support agreement within the precept of the Southeast Asia Energy Transition Partnership (ETP), which is under the platform of the energy efficiency innovation window.
The company said it is expecting that the ETP grant will “support the IGAs of a portfolio of 11-15 energy efficiency projects,” that so far, had been initially assessed to require capital expenditures (capex) in the order of P1.0 billion.
Climargy further indicated that “the proceeds of the three-year grant program will be used to subsidize the upfront costs of investment-grade energy audits (IGA), as a means to prepare energy efficiency investments into the C&I of the Philippine energy end-use market.”
As emphasized by Alexander Ablaza, “by de-risking IGA studies, we remove an upfront barrier to the preparation of investment-ready energy efficiency projects.”
The push for energy efficiency as well as conservation measures had been among the flagship programs being advocated by the Marcos administration; and that is a policy prescription underpinned by Republic Act 11285 or the Energy Efficiency and Conservation Act.
Via its tie-up with the UN body, Climargy pointed out that if the ETP-supported energy efficiency projects “succeed in attracting equity capital and eventually be completed, the achieved energy savings could lead to 457 million tons of CO2 (carbon dioxide) equivalent in greenhouse gas emission reduction.”
The company similarly highlighted that the potential cost savings to be generated by these C&I energy efficiency projects could reach humongous P67 billion worth through year 2040.
Climargy explained that “before EE projects qualify for any form of financing, IGAs are required by providers of capital as they determine reliable estimates of the energy savings, capital expenditures and other opportunities or risks arising from a given EE project.”
Mikhael Fiorello Llado, head of Investment Operations at Climargy, qualified that “in an IGA, as ESCO (energy service company) measures baseline energy consumption and load profile information from the host entity and proposes a detailed program of specific capital investments in technologies and systems to deliver the energy savings and ultimately the cash flows that would allow full recovery of the EE investments.”
He added “typically, the decision to conduct an IGA is oftentimes delayed by the inability of either the ESCO or end-use customer to finance or assume the risks associated with project preparatory task.”
