Project Management Unit -...

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

CY2015 Accomplishment

Report Philippine Chiller Energy Efficiency Project

Project Management Unit

P E P P O F F I C E , D E N R C O M P O U N D , V I S A Y A S A V E N U E , D I L I M A N , Q . C .

2015 ACCOMPLISHMENT REPORT PHILIPPINE CHILLER ENERGY EFFICIENCY PROJECT

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1. Project Data Sheet Title : PHILIPPINE CHILLER ENERGY EFFICIENCY PROJECT Implementing Agency: Department of Environment and Natural Resources (DENR) –

Environmental Management Bureau (EMB) as the Project Management Unit (PMU)

Sector/Sub-sector : Environment Region(s) : NCR, Regions III, IVA, VI, VII, XI, and XVIII (NIR) Province(s) : Metro Manila, Pampanga, Cavite, Iloilo, Negros Occidental,

Cebu and Davao Municipalities(s) : Beneficiaries : The Peninsula Manila, Bank of the Philippine Islands -

Buendia Center, SM City Iloilo, Marco Polo Davao Hotel, Waterfront Cebu City Hotel and Casino, International School Manila, BA Lepanto Condominium Corporation, New World Makati Hotel, TriNoma Malls, Waterfront Manila Pavilion, 6750 Ayala Avenue Joint Venture, Tower One and Exchange Plaza, Cultural Center of the Philippines, SM Fairview and Radisson Blu Cebu Hotel.

Objective(s) : To phase out ODS-based and energy inefficient chillers that

would result in energy efficiency and overall reduction of greenhouse gas (GHG) emissions in the sector.

Description : The Philippine Chiller Energy Efficiency Project (PCEEP) is a

WB-assisted project which aims to replace ODS-based inefficient chillers with new and more energy-efficient new technology chillers through provision of financial incentive and technical assistance to a significant number of enterprises both in the private and public sectors which are identified in the pipeline for the 5-year plan (CY 2012-2016). PCEEP’s objective is to accelerate the conversion of existing inefficient ODS-based chillers to more efficient ones for the country to benefit from potentially significant energy savings and to eventually initiate a permanent market transformation of the chiller sector in the Philippines.

Among the major expected benefits of the project are: a) increased energy efficiency; and b) reduced Greenhouse Gas emissions.


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PROJECT COMPONENTS

Components

Output Indicators

Cost PM

End Targets

Original Revised

Component 1- Investments in Chiller Replacements

No. of chillers replaced

117M 375 chillers

53 chillers

Component 2- Measurement, Monitoring and Verification

% of chillers registered to CMIS

9.23M 100% of 375 chillers

connected to CMIS for CER

claims

34% of 53 chillers

registered to CMIS for

M&V

Component 3- Technical Assistance

No. of Trainings and Workshops

conducted

No. of Project Beneficiaries recognized

11.56M 15 Trainings and

Workshops

50 Project Beneficiaries

participated in the

Recognition Program

12 Trainings and

Workshops

50 Project Beneficiaries participated

in the Recognition

Program

Component 4 – Project Management

Operationalization of PMU

26.36M - -

PROJECT COST

ICC-Approved Cost Loan/Grant Agreement Cost1 Revised Cost2

TOTAL (PM) Total (PM) 164.5M Total (PM)

FOREX (PM) Loan/Grant Proceeds (__M)

GEF 117M OTF 45M

Loan/Grant Proceeds (_M)

LOCAL (PM) GOP (PM) Php2.15M GOP (PM)

Conversion Rate 1 USD = Php45

(Source: PAD)

1 applicable to ODA projects/programs only 2 subject to ICC approval (indicate date)

IMPLEMENTATION SCHEDULE Project Start Date : January 5, 2011 Physical Completion Date Original : January 1, 2015 (GEF) / January 1, 2017 (OTF)


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Revised : January 1, 2017 (GEF and OTF) Loan Details (if applicable) Fund Source : Global Environment

Facility (GEF) and Ozone Trust Fund (OTF) for the Implementation of the Montreal Protocol

Interest Rate (%) : N/A

Loan/Grant No. : OTF TF96093 GEF TF95991

Service Charge (%): : N/A

Loan/Grant Amount (Original Currency)

: GEF USD 2.6M OTF USD 1M

Commitment Charge Maturity Period

: N/A : N/A

Signing Date : June 28, 2010 Grace Period : N/A Effectivity Date : January 5, 2011 Cancellations Closing Date Amount Cancelled : N/A Original : January 1, 2015

(GEF) / January 1, 2017 (OTF)

Date Cancelled : N/A

Revised (1st): : January 1, 2017 (GEF and OTF)

Revised (2nd): :


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2. Significant Project Outputs in line with the DENR Priority Program

PRIORITIES PROJECT CONTRIBUTIONS

Clean Air Not Applicable

Clean Water and Solid Waste Management

Not Applicable

Resource Conservation, Protection, Productivity

Not Applicable

Enhance Revenues from Natural Resources

Not Applicable

Climate Change Adaptation and Mitigation

Increased awareness of the chiller/energy sector of its operation and contribution to climate change. Replacement of energy-efficient chillers would result to overall reduction in electricity consumption and GHG emissions.

Good Governance

Contributed in the implementation of the phase-out of Chlorofluorocarbons (CFCs) and Hydrochlorofluorocarbons (HCFCs) and CO2 emission reduction implemented by the government (DENR) through awareness and training programs of the Project. Build Capacity of the chiller owners, energy service companies (ESCOs), the commercial, industrial, financial and government sectors in realizing carbon finance. Strengthen the implementation of RA 10121 (Disaster Risk Reduction and Management Act of 2010) and RA 9729 (Philippine Climate Change Act of 2009).


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3. NARRATIVE REPORT ON ACCOMPLISHMENTS PER COMPONENT

Component 1: Investment in Chiller Replacement This component of the project pertains to the provision of subsidy to project beneficiaries. The subsidy level would be based on the ex-works cost of the new chiller or the normative cost of the new chiller set by the project, whichever is lower. The prospective Project Benefiaries must comply with the eligibility and requirements of the project and must submit suspensive conditions documents in order to process the payment of the subsidy. The funding requirement for the payment of subsidy to qualified chiller owners would be charged against the Global Environment Facility (GEF) grant i.e., USD 2,600,000.00. PCEEP Chiller Pipeline In CY2015, the Project Management Unit was able to facilitate the signing of 21 sub-grant agreements that would cover 58 chiller replacements in CYs 2015 and 2016 from 17 establishments. The PMU was able to obligate 32 chiller units from 10 establishments. The obligated amount is Php 36,977,782.92. The other chiller replacements would be obligated using the CY2016 Special Allotment Release Order (SARO) to be issued by the Department of Budget and Management (DBM). Below is the summary of the PCEEP Chiller Pipeline for CY2015 and 2016.

Chiller Owners No. of

Old Chillers

SGA Signed

Obligation

SM City Southmall 2 1 SARO 2015

SM City Fairview 1 1 SARO 2015

Radisson Blu Cebu Hotel 2 1 SARO 2015

Philippine National Bank 2 1 SARO 2015

Insular Life Alabang 2 1 SARO 2015

Marco Polo Davao Hotel 1 1 SARO 2015

Robinsons Manila 5 1 SARO 2015

Robinsons Galleria 10 1 SARO 2015

Robinsons Bacolod 4 1 SARO 2015

Robinsons Iloilo 3 1 SARO 2015

Sub-Total 32 10


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SM City Bacoor 2 1 SARO 2016

SM City Manila 2 1 SARO 2016

SM City Fairview (Batch 2) 2 1 SARO 2016

SM City Southmall (Batch 2) 2 1 SARO 2016

SM Bicutan 1 1 SARO 2016

SM Sucat 2 1 SARO 2016

Radisson Blu Cebu Hotel (Batch 2) 1 1 SARO 2016

Insular Life Alabang (Batch 2) 2 1 SARO 2016

Robinsons Star Mills San Fernando Pampanga 5 1 SARO 2016

Robinsons Imus, Cavite 3 1 SARO 2016

Robinsons Metro East - Cainta, Rizal 4 1 SARO 2016

Sub-Total 26 11

Total 58 21

Chiller Replacement and Subsidy Payment In CY2015, the DENR was able to pay subsidy amounting to Php 13,461,688.95 for the chiller replacements at SM City Iloilo, SM City Fairview, Manila Pavilion, 6750 Ayala Avenue Center, Tower One and Exchange Plaza, Radisson Blu Cebu and Cultural Center of the Philippines. Details of the subsidy payment are shown in the Table below:

Name of Payee/Supplier

No. of Chiller Units Paid

Obligation in PhP

Disbursements in PhP

Charged to: CY 2013 Appropriation - PhP 44,982,000.00 (@41.608)

1 Acesite (Phils.) Hotel Corporation (Waterfront Manila Pavilion)/COFELY

2 2,496,480.00

2,077,200.30


2 Cultural Center of the Philippines 1 1,344,450.00

1,272,425.91

3 Ayala Land Inc. (6750 Ayala Avenue Office Tower)

2 2,581,344.00

2,581,344.00

4 SM Prime Holdings Inc. (SM City Iloilo chiller No. 4)

1 1,614,600.19

1,614,600.19

5 Philippine Integrated Energy Solutions, Inc. (Tower One Plaza)

2 2,688,900.00

2,541,107.30

6 International School Manila Inc.(refund of tax witheld deducted from subsidy)

N/A

190,863.89


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7 SM Prime Holdings Inc. (Radisson Blu Cebu Hotel)

2 1,846,895.40

1,846,895.40

8 SM Prime Holdings Inc. (SM City Fairview) 1 1,472,163.00

1,472,163.60

9 Ayala Land Inc. N/A 55,952.87

55,952.85


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Component 2: Measurement, Monitoring and Verification This component of the project pertains to the measurement, collection and analysis of technical data that would quantify key project indicators such as energy savings, ozone depleting potential (ODP) abatement, MW-demand reduction, and greenhouse gas emission reduction. This component of the project involves collection of monitoring data and the conduct of chiller monitoring visits to project beneficiaries. This project component also involves maintenance of a management information system. Collection of Monitoring Reports from Project Beneficiaries In CY2015, the Project Management Unit was able to collect 143 monthly monitoring data from Project Beneficiaries submitted through the PCEEP Chiller Management Information System (CMIS). Through series of technical trainings on the CMIS conducted by the PMU, Project Beneficiaries were submitting the monitoring logs online through the CMIS. The PMU monitors the submission and reviews the monitoring data submitted by the project beneficiaries. The following project beneficiaries have submitted the monthly monitoring data to the CMIS: The Peninsula Manila, BPI Buendia Center, SM City Iloilo, Marco Polo Davao Hotel, Waterfront Cebu City Hotel and Casino, International School Manila, New World Makati Hotel, Trinoma Malls, Manila Pavilion, 6750 Ayala Avenue Center, Tower One and Exchange Plaza and Cultural Center of the Philippines. The monthly monitoring reports became the basis for the calculation of the energy savings and emission reductions attributable to the project. Key Performance Indicators As of December 2015, the Project was able to have the following accomplishments as per Project targets:

Indicators Units of

Measurement

End of Project Target

Achievement for the Quarter

As of December 31,

2015

GEF Grant PDO Level Results Indicator

Cooling capacity addressed by the Project

No. of TR 30,649 10,970 25,947

ODP consumption phase-out due to replacement of chillers

ODP tonne 5.7 2.27 2.99

Cumulative carbon emission reduction as direct

ktCO2e 62.4 45.25 70.67


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Indicators Units of

Measurement

End of Project Target

Achievement for the Quarter

As of December 31,

2015

benefits from the project

GWh savings and MW demand reduction

GWh MW

124.0 10

10.21 5.29

18.45 11.15

Annual Chiller Monitoring Visit One of the technical assistance offered by the Project to Project Beneficiaries is the conduct of the annual monitoring visits to assess the performance of the chillers subsidized by the Project. In CY 2015, the Chiller Specialist conducted monitoring visits to the following project beneficiaries: The Peninsula Manila, BPI Buendia Center, SM City Iloilo, Waterfront Cebu City Hotel and Casino, International School Manila, New World Makati Hotel, BA Lepando Condominium, Trinoma Malls, Manila Pavilion, 6750 Ayala Avenue Center, Tower One and Exchange Plaza, Cultural Center of the Philippines, and Radisson Blu Cebu. Management Information System The Project is maintaining a project website with a URL address at http://emb.gov.ph/portal.pceep.

http://emb.gov.ph/portal.pceep


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Component 3: Performance Standards and Technical Assistance This component of the project pertains to the conduct of capacity building activities involving project stakeholders to enhance their knowledge and awareness about the project. These activities include the conduct of technical workshops, meetings, attendance to national and international conferences as well as the conduct of recognition ceremonies to recognize best practices done by the chiller industry. This component also includes preparation and publication of information, education and communication (IEC) materials that would communicate the accomplishments and lessons learned of the PCEEP. Project Awareness Workshop and Training Programs Meeting with Chiller Suppliers In view of the extension of the closing date of the GEF grant and the revision of the eligibility criteria particularly on the type of refrigerant of the replacement chiller eligible to receive the PCEEP subsidy, the PMU met with Chiller Suppliers to update them on these developments. The PMU met with the representatives of the following chiller suppliers:

Aircode Philippines

Daikin Philippines

Dunham Bush International Philippines

Stellar Equipment and Machineries Inc.

Carrier Conception Air-conditioning Company The PMU informed the Chiller Suppliers that during the extension of the closing date of the GEF grant, the Project would no longer subsidize chillers that utilize ozone depleting substances such as hydrochlorofluorocarbons (HCFCs) such as HCFC-123. Hence, chiller replacements to be covered by the Sub-Grant Agreements (SGA) to be signed beginning January 1, 2015 would not allow ODS-based chillers. Technical Workshop for Capacity Building In 2015, the PMU conducted the following technical workshop and capacity building activities:


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Workshop on the Development of the PCEEP Satisfaction Survey Instruments and Mechanics on the Conduct of Focus Group Discussion (FGD) with Project Stakeholders on May 13-15, 2015 in Subic, Zambales

Workshop on the Development of the PCEEP Satisfaction Survey Instruments and

Mechanics on the Conduct of Focus Group Discussion (FGD) at the Vista Marina in Subic, Zambales

Training on the PCEEP Chiller Management Information System (CMIS) involving Project Beneficiaries in the National Capital Region on August 11, 2015, Cebu City on November 10, 2015 and Iloilo City on November 12, 2015.

Training on the PCEEP Chiller Management Information System (CMIS) at the Riviera Sulo


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Hotel in Quezon City

COSTab Training on October 5-9, 2015

COSTab Training at the Sunrise Holiday Villa in Tagaytay City

Writeshop on the Guidelines for the PCEEP Award and Recognition on October 21-23, 2015

Writeshop on the Guidelines for the PCEEP Award and Recognition at H20 Hotel in Manila


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Recognition and Awards The activity was rescheduled in 2016. Production of IEC Materials The production of IEC materials was put on hold pending the hiring of the IEC Consultant. The IEC Consultant was only engaged in October 2015. The IEC materials are expected to be submitted. Attendance to National and International Conferences The Project sent representatives to the 4th Annual Asia Pacific District Cooling Conference on August 25-27, 2015 in Bangkok, Thailand. The activity was organized by Fleming Gulf Conferences with the support of the Metropolitan Electricity Authority. The following are the representatives of the DENR to the international conference:

Names of Participants Office

Mr. Angelito Estrada General Services Division

Mr. Jaime Bacobo General Services Division

Conduct of the DENR District Cooling System (DCS) Mission The DENR conducted a DCS Learning Mission in United Kingdom and Japan in December 2015. The DENR DCS Learning Mission was conducted at the King’s Yard Energy Centre at the Queen Elizabeth Olympic Park in Stratford City, United Kingdom while the DENR DCS Learning Mission in Japan was conducted at the Shinjuku District Heating and Cooling Centre in Tokyo, Japan and Makuhari District Heating and Cooling Centre in Chiba, Japan. The following are the DENR officials and personnel and PMU representatives who attended the DCS missions:

Name of Participants Office DCS Mission Venue

1. Usec. Analiza R. Teh DENR Chief of Staff United Kingdom

2. Asec. Corazon Davis Administration and Finance United Kingdom

3. Ms. Consolacion Crisostomo DENR - EMB United Kingdom

4. Ms. Marilou Calado DENR - FASPS United Kingdom

5. Mr. Jo-Rex Camba PCEEP - PMU United Kingdom

7. Ms. Maybel Mangubos DENR - FMS Japan

8. Ms. Carolina Lopez DENR - FMS Japan

9. Mr. Hannibal Ramos DENR - GSD Japan

10. Mr. Peter Ramis Reyes DENR - GSD Japan

11. Engr. Jose Grajeda PCEEP - PMU Japan


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DENR DCS Mission in the United Kingdom

DENR DCS Mission in Tokyo and Chiba, Japan

The Qatar leg of the DENR DCS Learning Mission was rescheduled in February 2016 due to visa considerations. Project Assessment and Planning The Project conducted the Strategic Planning and Assessment Workshop on January 22-23, 2015 in Tanay, Rizal. The activity was attended by representatives from the DENR-FASPS, DENR-FMS, EMB and Project Management Unit of the PCEEP.


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PCEEP Strategic Planning and Workshop at the Punta Fabian in Tanay, Rizal

The Project also conducted the mid-year assessment on June 24-26, 2015 in Cebu City.

PCEEP Mid-Year Assessment Workshop at the Quest Hotel in Cebu City


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Component 4. Project Management This component of the project pertains to the operationalization of the PMU. Activities under this component included the following: hiring of project staff and consultant, procurement of goods, conduct of review missions, among others. Procurement of Goods and Services Hiring of Project Staff The Project was able to hire Financial Analyst, Technical Assistant and Database Management Assistant (MIS Assistant) to assist the PMU. The following project staff were hired by the DENR:

Name of Project Staff Designation Date Hired Remarks

Ms. Diana D. Virtusio Technical Assistant January 1, 2015 Renewal July 1, 2015

Ms. Izel Ibardolaza Financial Analyst January 1, 2015 Resigned in August 2015

Ms. Myrna Caguioa Financial Analyst October 7, 2015

Ms. Jasmine Redula Database Management Assistant

August 3, 2015 Resigned in December 2015

Hiring of Project Consultant The Project was also able to engage Mr. Ferdinand Esguerra as the Information, Education and Communication (IEC) Consultant to facilitate the development of IEC messages and materials. The IEC Consultant submitted the inception report and Communication Plan. Repair of the Project Vehicle During the World Bank Mission in August 2015, the World Bank did not agree on the cost of the repair of Project vehicle amounting to Php 200,000.00. Repair/Renovation of the PCEEP Office The budget for the renovation of the PCEEP Office was realigned to cover the cost for the hiring of the IEC Consultant. The realignment was approved by the DENR Management. Conduct of World Bank Missions The World Bank conducted two (2) review missions in CY2015. The first review mission in 2015 was conducted on February 26 – March 3, 2015 while the second review mission was


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conducted on August 25 – September 4, 2015. The review missions were conducted at the DENR compound in Diliman, Quezon City. The main discussion of the World Bank Review Mission in February 2015 was focused on the marketing strategy to be adopted by the DENR in view of the extension of the closing date of the GEF grant from January 1, 2015 to January 1, 2017.

World Bank Mission conducted on February 26 – March 3, 2015

Meanwhile, the main objective of the World Bank Review Mission in August 2015 was focused on the chiller pipeline for CY2015 and 2016.

World Bank Mission conducted on August 25- September 4, 2015

Compliance to the Audit Report The Project submitted the Management Report of the Commission on Audit on June 30, 2015. The COA Audit Report is one of the legal covenants to be submitted to the World Bank stated in the grant agreement.


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4. FINANCIAL PERFORMANCE As of 30 December 31, 2015, the overall obligation rate of the Project was 58% (or Php104,380,545.79). Of these amount, the Project was able to disburse Php 56,371,747.15(equivalent to 31% disbursement rate). This reflected a percentage increase of 9% from the previous quarter or approximately an increase of PhP-4,591,034.15 (see table 4.1). The tables below show the overall financial performance of the Project as of December 31, 2015. Table 4.1 PCEEP Disbursements as of December 31, 2015

Fund

Allotment as per SARO Issued

Obligation As of

December 31, 2015

Disbursement

As of December 31, 2015

Obligation Rate

(obligation vs.

allotment)

Disbursement Rate

(disbursement vs.

allotment)

Disbursement Rate

(disbursement vs.

obligation) Year Amount

GEF

2013 44,982,000 20,672,711 16,649,747 46% 37% 81%

2014 42,673,500 17,580,471 14,476,692 41% 34% 82%

2015 38,280,000 36,977,783 3,375,012 97% 9% 9%

Total GEF 125,935,500 75,230,964 34,642,734 60% 28% 46%

MLF

2011 11,240,000 11,116,956 8,106,544 99% 72% 73%

2013 15,478,900 9,047,055 7,029,275 58% 45% 78%

2014 13,533,000 3,012,581 2,455,507 22% 18% 82%

2015 12,785,750 5,687,990 3,347,107 44% 26% 56%

Total MLF 53,037,650 29,149,582 21,729,013 55% 41% 75%

GRAND TOTAL

178,973,150 104,380,546 56,371,747 58% 31% 54%

Data Source: PCEEP – Project Management Unit GEF Performance The Special Allotment Release Order (SARO) for GEF grant was issued on May 21, 2015. For this quarter, the Project disbursed the amount of Php 3,375,012 which is equivalent to 9% from the CY 2015 Allotment. The Project was able to obligate the amount of Php36,977,783 equivalent to 97% from the CY 2015 Allotment as of December 31, 2015 for the subsidy for the chiller replacements of Radisson Blu Cebu Hotel (2 units), SM City Fairview (1 unit), Philippine National Bank (2 units) and Marco Polo Hotel Davao (1 Chiller), Robinsons Place


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Manila, Robinsons Galleria, Robinsons Place Iloilo, Robinsons Place Bacolod, The Insular Life Assurance Company and SM City Southmall. The PMU endorsed payment of subsidy for the chiller replacements of Ayala Life FGU Center Makati last December 2015. Tables 4.2, 4.3 and 4.4 show the GEF disbursements as of December 31, 2015. Table 4.2 GEF Disbursements as of December 31, 2015 from 2013 Allotment.

Chiller Owner

Amount of

Subsidy

Date of Payment

The Manila Peninsula 1,362,438 20 May 2013

Bank of the Philippine Islands –Buendia 998,592 07 March 2014

Marco Polo Davao Hotel 916,270 01 August 2014

Waterfront Cebu City Hotel & Casino 2,808,540 03 October 2014

New World Makati Hotel 1,747,536 16 October 2014

BA Lepanto Condominium Corporation 836,321 17 October 2014

Trinoma Mall 5,902,849 30 October 2014

Waterfront Manila Pavilion 2,077,200 16 March 2015

Total 16,649,747

Data Source: PCEEP – Project Management Unit Table 4.3 GEF Disbursements as of December 31, 2015 from 2014 Allotment.

Chiller Owner

Amount of

Subsidy

Date of Payment

SM City Iloilo (Chiller No. 1&3) 3,045,706 19 June 2014

International School Manila, Inc. 3,562,792 06 November 2014

SM City Iloilo (Chiller No. 4) 1,614,600 06 February 2015

Tower One Plaza 2,541,107 26 August 2015

Cultural Center of the Philippines 1,272,426 8 September 2015

Ayala Land Inc. 2,581,344 14 September 2015

Total 14,617,976 Data Source: PCEEP – Project Management Unit Table 4.4 GEF Disbursements as of December 31, 2015 from 2015 Allotment

Chiller Owner

Amount of Subsidy

Date of Payment

Ayala Land Inc 55,953 14 September 2015

SM Prime Holdings Inc. (Radisson Blu Hotel Cebu) 1,846,895 18 September 2015

SM Prime Holdings Inc. (SM City Fairview) 1,472,164 8 December 2015

Total 3,375,012 Data Source: PCEEP – Project Management Unit


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MLF Performance The Department of Budget and Management (DBM) released a total allotment of Php 12,785,750.00 for CY 2015 for MLF component. The first Special Allotment Release Order (SARO) for the MLF component of the Project was released on March 6, 2015 amounting to Php 6,177,750.00. The supplemental SARO was released on May 21, 2015 valued at Php 6,608,000.00. The Project was able to obligate Php 5,687,989.73 and disbursed Php 3,347,106.86 as of December 31, 2015. This is equivalent to 26% rate of disbursement from the CY2015 allotment for MLF. The Said amount comprised salaries of project staff, expenses for workshops, transportation cost for trainings, meetings and field visits.

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