THE Philippine Economic Zone Authority (Peza) is looking to offer preferential power rates in economic zones located in three regions in Mindanao in a bid to attract sizable manufacturing investments in underdeveloped Mindanao.
Peza Director General Charito B. Plaza said the Autonomous Region in Muslim Mindanao (ARMM), Region 11 (Davao region) and Caraga Administrative Region (Caraga) will be the initial three regions where ecozones may receive a lower rate of P2.50 per kilowatt-hour.
“The Department of Energy committed to give that rate to ecozones in Mindanao, and they asked for a list of the first three regions,” Plaza told reporters in a recent briefing.
The Mindanao region is foreseen to have excess power of 1,000 megawatts (MW) in 2018, the Mindanao Development Authority was quoted earlier as saying, owing to the simultaneous operations of several coal-fired power plants in the region.
Some prospective ecozone developers and investors are said to be interested in putting up agro-industrial and halal hubs in the southern region.
More than the preferential power rates, Peza is open to again offer substantial power subsidies to large that manufacturing firms that are big electricity consumers.
Presidential Executive Order (EO) 856, approved by former President Gloria Macapagal-Arroyo, provides for incentives on power discounts that will be sourced from the Industry Competitiveness Fund created by EO 796 in 2009.
That EO was issued to attract power-intensive industries into the Philippines in support of foreign- inward investments and business environment competitiveness.
The EO said the ICF is used to recover any financial impact that Power Sector Assets Liabilities Management (PSALM)/National Power Corp. (NPC), Transco and Peza have incurred in the grant of special power rate through a reimbursement mechanism.
The designated agency, may it be Peza or another investment-promotion agency, will then transfer the reimbursement to the company, representing the discounts on the power utilized and fully paid by the firm at the onset of operations.
The previous administration has been criticized for the slow rollout of the reimbursement, only giving out the amount in the last year of the period they’re given as a participant in the ecozone rate program (ERP).
The ERP was created via a memorandum of agreement between the NPC.-PSALM and Manila Electric Co. in 2007, agreeing to give special power rates to particular, Peza-qualified ecozone locators.
Plaza is eyeing to offer these special rates to potential big-ticket investors that Peza hauled in from the Middle East.
“[The implementition of the power rates] can start once these applicants are already here, because we’re still going to look at the ecozone locations for them,” Plaza said.