Christine Eibs Singer, CEO of E+Co and Frederick E. LaCroix, CEO of PowerSource MicroGrid Operations (PMO), recently announced an expansion of an existing partnership with a $1.1 million investment by E+Co in PMO-Liminangcong, in Northern Palawan, Philippines.
PMO, the Philippines subsidiary of US-based The PowerSource Group LLC, is implementing a business model to catalyze rural electrification and livelihood development in Southeast Asia. Through its combined power generation and livelihood development platform, termed the “Community Energizer Platform or “CEP,” PowerSource is currently energizing un-electrified communities across the Philippines. The CEP is a microgrid system combining electricity generation with distribution and household interconnection. Each CEP serves approximately 1,000 – 2,000 households.
Following early development initiatives based on diesel-only power generation systems, PMO approached E+Co for support in the implementation of a predominantly renewable energy-generated electrification program. Relying predominantly on locally produced biomass, PowerSource is reducing its reliance on fossil fuels by 30-70% in its rural electrification microgrids. The remaining power comes from higher efficiency diesel based generation – bio-diesel when available. PMO intends to become the primary supplier of electricity in off-grid, rural areas of the Philippines.
PMO has plans to replicate the CEP microgrids across the Philippines. The initial projects in Rio Tuba, Palawan Province, and on Malapascua Island, in Cebu Province , are both operating successfully, having received financing support from E+Co. Liminangcong, the third PowerSource project supported by E+CO, is a remote community in Palawan Province. It serves as the major western port of entry into Palawan but currently receives no more than six hours of power a day, relying on small diesel genset with frequent brownouts and poor environmental records.
Via the partnership with E+Co, PMO will install a hybrid microgrid to provide 24/7 electricity to unconnected households and existing commercial establishments suffering from power shortages, including ice plants, storage facilities and cell phone tower sites. Current on-site electricity sources are inadequate to supply continuous uninterrupted electricity. Additionally, the local fishing industry relies on inefficient and dirty diesel-fueled kits to supply electricity for fish cold storage.
The importance of this investment for E+Co is the alignment with PMO investment objectives, to achieve a material financial, social and environmental impact in the communities served by PMO:
- The CEP is an appropriate business model for rural electrification in the Philippines, specifically focused on areas that will not be served by the existing electricity distribution companies.
- PMO commits to using renewable energy, mainly biomass, in its CEP microgrids, constituting a minimum of 30% of the total electricity generated. The reliance on renewable energy also creates local jobs, potential carbon offsets, electricity tariff stability and decreased environmental concerns for local people.
- The investment in PMO follows E+Co’s dual “development-company, project finance” investment model.
Said E+Co’s Eibs Singer of the transaction: “E+Co believes in the business proposition of PMO – that a financially viable, rural electrification project can deliver not just sound financial returns,but also deliver measurable social and environmental impacts to the rural communities of the Philippine islands. We look forward to future transactions that will allow PMO to scale its business model.”
LaCroix of PMO states: “PMO is extremely pleased to continue and expand its partnership with E+Co. The support from E+Co, both advisory and financial, has allowed us to establish two strong operations, at Rio Tuba and at Malapascua, from which to expand our impact. Our mutual commitment to having social and environmental impact, in addition to financial impact, makes E+Co an ideal partner. We look forward to working together for years to come.”
By Anne Murray, Senior Development Officer