DOE pushes ecozones for power projects

MANILA, Philippines - The Department of Energy (DOE), along with other government agencies, is pushing for the creation of economic zone-like areas to fast-track energy projects.

The development would encourage investments in power generation by speeding up the permitting process, a Department of Energy (DOE) official said.

In a briefing, DOE undersecretary Josefina Patricia Asirit said the DOE and other economic managers pitched before the Joint Congressional Power Commission (JCPC) the law that would make energy projects as projects of national significance.

This would include the creation of special economic zones that would host power generation projects.

“We have raised these issues to the JCPC, which gathered the wish list of generation companies,” Asirit said.

Power generation projects are hampered by slow permitting process, varying local government rules and environmental concerns.

“There is recognition of the need to do this but it has to be studied well because of the impacts on the local government units (LGUs),” Asirit said.

The DOE will conduct a study on the potential ecozones to prevent host communities from being disenfranchised, Asirit said.

But the DOE will make sure that LGUs will get a share in the taxes paid by ecozone-based companies operating in their area, Asirit said.

To date, there are 271 operating ecozones in the country, composed of manufacturing ecozones, information technology parks, agro-industrial ecozones, tourism ecozones, and medical tourism centers.

Benefits of ecozone locators include tax-free importation of capital equipment, income tax holiday and faster permitting process.

“It is part of establishing an investment climate that is conducive to investors,” Asirit said.

In the Power Development Plan 2010-2030, the Luzon grid would need some 11,900 megawatts (MW) of additional power.

Some 2,150 MW and 2,500 MW of new generation capacity are needed for the Visayas and Mindanao grid, respectively.

Of the energy generation capacity needed in the country, only a small portion is “committed” or projects that have already secured bank financing.