JICA, DBP work on disaster resiliency mechanism for Philippine electricity sector

MANILA, Philippines - The Japan International Cooperation Agency (JICA), the Development Bank of the Philippines and other domestic financial institutions are collaborating to help make the power sector resilient to natural disasters.

JICA is sharing knowledge on financial incentive mechanism to help improve disaster resiliency of the Philippines’ electricity sector, particularly power distribution networks.

Noriaki Niwa,  chief representative of JICA Philippines, said Japan and other Asian countries like the Philippines are prone to natural disasters.

“It is timely to introduce Japan’s counter-measures against disasters to address economic and social losses, boost long-term competitiveness, and reduce the potential fiscal and financial burden of the central and local governments,” Niwa said.

JICA has been conducting a data collection survey project that will apply Japan’s Business Continuity Management (BCM) rating system to measure Philippine electric cooperatives’ disaster resiliency.

Based on the rating developed and now being implemented by the Development Bank of Japan, an electric cooperative can access preferential terms and conditions for loans to optimize disaster recovery.

JICA held a series of seminars with the National Electrification Administration, DBP and the member banks of Association of Development Financing Institutions of Asia and the Pacific (ADFIAP), to introduce several other counter-measures for the long-term financial stability of Philippine electric cooperatives.

These countermeasures include strengthening network facilities, building up buffer stock, and making a BCM plan.

“The measures aim to contribute to damage reduction and early recovery of the electric cooperatives’ distribution network,” the JICA representative said.

During Typhoon Yolanda in 2013, electric power distribution infrastructure in affected areas suffered the most, destroying 12 out of the 33 electric cooperatives, and about 25 of them collapsing.

The National Economic Development Authority (NEDA) reported that total damage in the electricity sector during Typhoon Yolanda was estimated at P6.83 billion, with the distribution sector accounting for about P5.2 billion of said damages. This showed the severe vulnerability of the country’s electrical distribution facilities against strong typhoons. 

Results of the survey project will be shared with other important stakeholders including Department of Energy, Department of Finance, Energy Regulatory Commission and the governmental financial institutions (DBP and Land Bank of the Philippines) for their policy making purposes, and further contribute to the Philippines’ overall disaster resiliency.

Aside from this, JICA is also actively involved in promoting Area Business Continuity Management/ Plan (A-BCM/P) for businesses, including utility companies, national and local government agencies, private sectors as well as its supply chain, in Asean’s industrial areas, particularly during and after disasters.

Japan, like the Philippines, is located along the Pacific Ring of Fire, and is also prone to natural disasters. Thus, public and private stakeholders in Japan have been mainstreaming disaster risk reduction in its development policies and investment programs. In 2011, 45.8 percent of large companies and 20.8 percent of medium-sized companies in Japan have established their BCPs.

JICA is the world’s largest bilateral aid agency with about $10.3 billion in financial resources and a network of more than 100 overseas offices around the world.