AMORE LIWANAG December Issue

December March 2012 2012

Volume 1 Issue Volume 1 Issue42

LIWANAG

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*Brightness or luminosity

An AMORE Program Newsletter

Redefining

SUSTAINABILITY: The community as giver-receiver of light, water and improved education

The Alliance for Mindanao and Multi-Regional Renewable/Rural Energy Development or AMORE Program is a collaboration among the Department of Energy, United States Agency for International Development, SunPower Foundation and Winrock International toward electrification of remote, off-grid rural communities using renewable energy sources such as solar and micro-hydro.

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From the

COP’s Desk

The end of the year, when there’s only a few days left before turning a new leaf, is usually the best time to reflect on the closing year’s successes and accomplishments, weaknesses and challenges. We at the AMORE Program will take this opportunity to share with you the product of this constant process of reflection and re-thinking of strategies and approaches on how to effect sustainable, lasting impact in the social and industry spaces where we work.

The illustration for the cover of this issue of LIWANAG captures quite neatly our fundamental tenet on sustainability: community empowerment. The days of community members as mere recipients of grants and assistance are long gone. Now, the receiver is the rightful owner (not only of project benefits but of the accompanying responsibilities), project manager and primary stakeholder to the development program, and it is on his shoulders, more than anyone else’s, that the sustenance and growth of the project lie.

In the succeeding pages we will share with you how we tried to the best of our ability to prepare local communities for this task. You will find out how the transformation to renewable energy entrepreneurs of some community associations is coming along, and how we worked hard to get the support of key government agencies like the Technical Education and Skills Development Authority and the Department of Education to mainstream and institutionalize the program interventions, for example, the new technicalvocational courses on solar photovoltaic technology.

More than the gifts of light, safe water and modern education technology, the real gift that we will leave to the communities is the power and ability to better their condition through their own creative efforts.

Have a meaningful holiday season!

Laurie B. Navarro Chief of Party

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BRINGING MODERN ENERGY SERVICES

TO RURAL HOUSEHOLDS Over the years, the Alliance for Mindanao and Multi-regional Renewable/Rural Energy Development (AMORE) program has slowly built and beefed up the elements constituting sustainable rural electrification. From national, regional and provincial institutions down to the community level, the program has set in motion innovative approaches and put in place mechanisms to help ensure that the benefits of renewable energy lighting not only be sustained for years to come by AMORE-energized communities, but also be extended to more off-grid rural households in the Mindanao region and beyond.

Community Association: the pivotal force that drives rural PV electrification At the core of AMORE’s rural electrification efforts is the local community organizations. Started as mere recipients of development assistance, members of village associations called the Barangay Renewable Energy and Community Development Association or BRECDA have gone beyond passive acceptance of grants and donations to being the primary drivers of rural PV electrification. With members’ technical, organizational, financial systems and entrepreneurial skills beefed up through appropriate trainings and capacitybuilding activities, the BRECDA is the force that is well-positioned to spread the benefits of renewable energy lighting to off-grid rural villages in Mindanao.

Of the 474 BRECDAs organized by AMORE since 2002, 50 had been assessed to be still functioning as an organization by 2010. Sixteen (16) of these showed tremendous potential to be entrepreneurs, and they were aptly guided by the program for their new role in rural electrification.

Women in the communities were given special attention by the program, and were looked upon as another group that is in a special position to drive electrification efforts in rural areas. In cooperation with activity partners, Asian Development Bank and Copper Alliance-Southeast Asia, AMORE launched a series of all-women training workshops on PV installation and servicing where a total of 66 women from 50 villages across 18 municipalities in Davao, Maguindanao, Sulu, Tawi-Tawi and Zamboanga Peninsula, participated.

Community Association

TESDA

Technical Education and Skills Development Authority: institutionalizing solar photovoltaic technology education Along with the growth of the solar PV market in Mindanao comes the challenge of providing after-sales services and necessary manpower support for PV industry development on the areas of PV installation, servicing and design. For four years, the program worked to mainstream PV education into the national technical-vocational education system, and in 2011, the Technical Education and Skills Development Authority (TESDA) in the Autonomous Region in Muslim Mindanao (ARMM), with help from AMORE, conducted a training course designed to prepare would-be trainers and assessors in conducting the newly promulgated three National PV Training Certification courses on PV systems installation, servicing and design. An initial batch of 21 trainers and assessors have graduated under these programmes and now train other would-be PV technicians all over the region, helping build a sufficient pool of PV experts that will adequately support the growing PV market.

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Microfinance Institutions and Renewable Energy Suppliers: the link to affordable PV technology

Microfinance Institution & Renewable Energy Supplier

Rolled out in December 2011, AMORE’s Business Development Assistance (BDA) scheme delivered 2,500 units of various capacities of solar PV products to 26 communities across Mindanao. Sourced from renewable energy suppliers, the PV products did not only mean start-up capital inventory for the BRECDAs, but also translated to business for the PV companies. More than 6 renewable energy companies – both those operating nationally and with provincial/regional focus – participated in AMORE activities – e.g. product exhibitions – that aim to promote renewable energy technology as a viable energy option for rural areas.

Solar PV business is catching on so that microfinance institutions (MFIs) have also ventured into it. With 600,000 pesos total accumulated revenue between the Bantol and Magsaysay BRECDAs in the Marilog District of Davao City, the two BRECDAs were able to get the Center for Agriculture and Rural Development-Business Development Services Foundation, Inc. (CARD-BDFSI) to do business with them. The MFI loaned out to each BRECDA an initial 50,000-peso worth of solar PV products (payable in six months), which the BRECDAs in turn leased out to members of their villages. And owing to a high collection performance by the two BRECDAs, CARD has recently upgraded their credit limit to 150,000 pesos.

And just recently CARD has now expanded its solar operations to Maguindanao, Zamboanga Peninsula and Tawi-Tawi. Beside the cash sales that the MFI has made to the Maguindanao BRECDAs, the same has already started lending to 2 BRECDAs due to the latter’s credit worthiness. In Tawi-Tawi, CARD is finalizing the business transactions with the province’s BRECDAs for further household lighting expansion and intensification. Sulu and Basilan PTAs likewise are keenly reaching out to expand the solar units that they have received from AMORE. And CARD is the lead institution that all of these BRECDAs are looking forward to for their service expansion to members.

AMORE has linked the BRECDAs to financing and technology sources so that the communities’ solar PV business may expand beyond AMORE’s program life.

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Motolite & Philippine Recyclers, Inc.

Motolite and Philippine Recyclers, Inc.: keeping clean energy technology truly clean To systematize the disposal of junk batteries in AMORE-assisted barangays where solar PV equipment are used, the program facilitated the forging of tripartite partnership agreements among the BRECDA, battery distributor, Oriental Motolite Marketing Corporation, and the recycling organization Philippine Recyclers, Inc. (PRI), for the collection and recycling of used lead-acid batteries or ULAB. Under the agreement, the BRECDA collects ULABs from the households in the village and then contacts Motolite, which then buys the ULABs from the BRECDA and transports them for recycling to PRI. Residents of the village have been trained on proper battery handling, and are aware of the toxic elements in a battery and its potential harmful effects to human health and the environment. Appropriate information materials, in the form of handouts, posters and tarpaulins, have been disseminated to the BRECDAs, schools and other local partners, to provide these organizations with the procedure and system to handle, manage and dispose these toxic materials.

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Kaya matibay ang walis, palibhasa’y nabibigkis.

(Strong is the broom whose sticks are bound.)

At the center of AMORE’s efforts on sustainability is the participation from and cooperation among all stakeholders – parents, teachers, students, and education institutions. At the very beginning of the project, members of the local community are encouraged to take ownership of the project, and are equipped with the necessary technical and organizational know-how to make the most out of the solar-powered educational television, as well as ICT (Information and Communication Technology), equipment, and for the longest possible time.

A major achievement for the program is getting recognition from the Department of Education for the impacts that distance education technologies cause to the students’ education. This recognition has made the government agency commit to oversee the use and maintenance of the facility in concerned rural schools.

Coordinators have been assigned from the schools division up to the regional levels to regularly monitor the use and effectiveness of the renewable energypowered educational television.

Mag-impok para sa tag-ulan.

(Save for a rainy day.)

As the solar photovoltaic system saves energy onto the batteries for use beyond daytime, including rainy days, the schools and communities that host them are also enjoined to save up for when technical troubles in the system occurred.

Through policies and mechanisms crafted by the schools and communities themselves, an operation and maintenance fund is regularly filled, and this will ensure availability of funds for the purchase of new batteries (at least PHP22,500 or USD550) which can run out in three years. The ParentsTeachers Association (PTA) handles the annual collection of fees from parents and safekeeps the money in a bank account registered under name of the PTA. Recently, AMORE performed an O&M fund collection monitoring, and results indicate an average 60 percent collection rate.

Schools where the solar PV systems and educational equipment were consistently used by the teachers posted good collection rate, while schools where some technical problems (e.g. busted electric outlet, defective regulator, etc.) had occurred failed to reach 50 percent collection.

Ang kabataan ang pag-asa ng bayan.

(Our children are the hope of our future.)

The AMORE program believes in this popular line no less than Jose Rizal himself did, and that is why the program has invested in modern technology to help in the education of young students in rural areas, particularly, in Mindanao.

Solar photovoltaic modules power up televisions and computers – all too common in urban areas but still a rarity in these parts of the country – to give students, who, until then had relied on hand drawn visuals, a better and clearer picture of the lessons of the modern world.

While AMORE’s school electrification projects are all about modernizing education methods, in this issue of LIWANAG, we look towards old adages for the wisdom that we will be wise to remember if the benefits of modern technology in these rural areas are to be sustained.

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PUMPING UP HEALTHIER LIVES THROUGH ACCESS TO SAFE WATER

AMORE went back to the schools and communities that have been using a safe water system for six months or longer, and these are what we found out:

1 Residents, especially women and children, spend less F time fetching water. Rural villagers used to spend as much as an hour and twenty minutes fetching water, and with a new source for potable water, fetching time now ranges between five and twelve minutes, giving residents an opportunity to devote more time for more productive activities.

3 Households and schools spend less money for water.

F To have water transported to them from neighboring villages, or sometimes, across bodies of water, households and schools spend from 2,000 to 3,000 pesos a month. Fees collected by the BAWASAs and PCTAs (Parents-Community-Teachers Association) for the use of the water system, meanwhile, would only range from 100 to 450 pesos monthly.

2 Villagers now have more water at their disposal. From F as little as 5 liters per person per day, the volume of water a person uses has gone up up to 60 liters, making rural residents able to go about their daily tasks more easily. Prior to the construction of the water systems, residents limited their water use to drinking and cooking owing to the distance of water sources and the significant cost of buying water from far sources.

With a more convenient source of water and a more abundant supply, villagers now use water for cleaning, doing laundry, gardening, and most important, to maintain good hygiene.

To keep the water and benefits continuously flowing from the potable water systems constructed by AMORE and its partners in rural schools and communities, the program once again looks to the very people the safe water projects serve.

To date the program has facilitated the formation of twelve (12) Barangay Water Associations or BAWASAs that will take care of the water systems’ operation and maintenance. Of the twelve BAWASAs, ten have been registered with the Department of Labor and Employment as people’s organizations.

Beyond managing the water projects, BAWASAs have all undergone organizational capacity building trainings to prepare them for their role as catalysts for development in their respective communities.

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How BRECDAs get to play their CARD right Gina Anunciado, the 36-year old mother of five, and the eightyear treasurer of the Barangay Magsaysay Renewable Energy and Community Development Association (BRECDA), gets away from her duties at her sari-sari (variety) store momentarily to attend to two men who had travelled from the North Cotabato side of Mt. Sinaka across the border to Davao City’s Marilog District, to take a look at “solar” items they had recently seen at their neighbors’ homes. A few of their neighbors in the village of Salasang had bought solar lamps from Brgy. Magsaysay, which they now use for their lighting needs instead of kerosene.

Organized by the Alliance for Mindanao and Multi-Regional Renewable/ Rural Energy Development or AMORE Program in 2004, the Magsaysay BRECDA has recently transformed itself into an enterprising association involved in the solar photovoltaic (PV) business. From a start-up capital inventory of 73 units of solar lanterns of various capacities provided

by AMORE in early 2012, the BRECDA has since added to their list of sold merchandise 75 units more of solar PV products, eight of which are solar home systems (six units of 40-watt peak SHS and two units of 25-watt peak SHS). “People here like ‘solar’ very much. It’s very convenient,” Gina says.

And it is that desirability of the technology among community members that Gina and her association are all too happy to capitalize on. Ranging from full-on solar home systems that can power up lights, an FM radio and a small black-and-white television to 5-watt-peak four-lamp solar lanterns to portable, low-capacity desk lamp-type lanterns, the BRECDA’s array of solar PV products correspond to every household’s lighting needs, and most important, capacity to pay.

Earning capacity is in fact the AMORE program’s primary consideration in choosing the type of solar PV product that will be commercially attractive and viable among the rural household market. After conducting a survey among AMORE-energized villages that determined

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The Magsaysay BRECDA is all too happy to supply the village’s lighting needs. In fact, residents from neighboring villages and from other districts have started to purchase solar PV products from the BRECDA.

Improving lives (and earning from it!)

their monthly energy expenditures and willingness and ability to pay for a solar PV product, the program reached the conclusion that the poorest of the poor rural households – the very households that constitute AMORE-energized barangays – spent for lighting as low as 30 pesos up to 150 pesos a month, and that portability and reliability are especially important among those that use light for livelihood activities, for example, for fishing and farming.

This knowledge guided the program in crafting the Business Development Assistance scheme through which select BRECDAs – one of which is the Magsaysay BRECDA – that showed organizational integrity and a huge potential for entrepreneurship were slowly guided to lead the way away from grant-dependent, and on to a commercial, sustainable renewable energy rural electrification.

Business partnership with a microfinance institution Five months after the Magsaysay BRECDA’s initial capital inventory got distributed among households on a lease-to-own scheme, microfinance institution Center for Agriculture and Rural Development or CARD entered the picture with its own solar PV loan portfolio.

CARD had previously ventured into the solar PV business some six years ago in the island of Mindoro, and was enticed to do the same – albeit following a different business model – in Mindanao following discussions with AMORE. CARD Business Development Services Operations Director Julius Alip says that the strength of the BRECDA as CARD’s business partner lies in the fact that they are a sufficiently able enterprising organization that lives right at the community, right within the market that CARD hopes to reach with its solar PV business. The retail model which

Solar PV products of various capacities meet each household’s lighting needs and capacity to pay.

they had piloted in the island of Mindoro years back had an inherent structural weakness which was bound to render the business too costly, and therefore, unviable in remote, dispersed rural villages.

Their Mindoro experience taught them to add other items to their solar PV products offerings too: from selling only high-capacity solar home systems, they eventually added to their portfolio solar lanterns of various capacities that the “bottom of the pyramid” – what the poorest of the poor in the consumer market is called – could afford.

With 360,000 pesos cash on hand, the Magsaysay BRECDA had enough confidence – not to mention cash – to expand the business.

Testing the neophyte entrepreneurs’ credit-worthiness, CARD initially loaned out 50,000-peso worth of solar PV products to the BRECDA, which the BRECDA then loaned out among village residents under a lease-to-own scheme that allowed the residents to pay the remaining balance – after paying a small downpayment – within a year. After paying a down payment amounting to 20 percent of the total loan value, the BRECDA was to pay the remaining balance to the MFI within six months.

The Magsaysay BRECDA had less than a month to go in their six-month agreement to pay for the remaining balance to CARD when they placed new orders for solar products. In October 2012, they placed new orders for 61 units of lighting products. Solar PV products were selling like the ubiquitous eggplants in the village, and the orders did not only come from within the community; residents from neighboring villages, including at the North Cotabato border, and villagers from as far away as Toril District, some 40 kilometers from Magsaysay, all come to cash in on the revolutionary lighting technology.

BRECDAs and CARD blaze the trail towards sustainable rural household electrification.

Because of the growing demand for solar products, the Magsaysay BRECDA thought of supplying as well components such as lamps, even batteries. They have started construction of what would be the village’s hardware store which will double as the BRECDA office. While fees collection has never really been a problem (the longest delay in payment by a customer that she has experienced as treasurer is two months), according to Gina, regular meetings are important to constantly remind BRECDA members of their commitment and responsibilities, and a permanent BRECDA office will host those meetings.

The BRECDA’s customers pay 120 pesos (USD3), 160 pesos (USD4) and 200 pesos (USD5) monthly for a low-, medium, and high-capacity solar lantern, respectively, and 250 pesos (USD6.25) for a 20-watt peak solar home system. “People pay,” Gina says, “because they appreciate the value of the equipment to their lives. They – we – use it in all aspects of our lives – our livelihood, our children’s education, our everyday life.”

Indeed, it is this social benefit that Magsaysay’s partner MFI CARD has identified as the MFI’s primary motivation for getting into the solar PV business. Solar PV lending constitutes less than 1 percent of the more than 6 billion-peso portfolio of CARD, yet they are most proud of what the around 7,000 units - including those sold to the Magsaysay BRECDA and two other BRECDAs in Marilog District (Bantol and Marilog) – of solar PV units that they had sold since 2011 have meant: light for those who purchased the PV systems, and business and livelihood for their partners – the women and community associations that serve as their connection to the rural household.

As of this writing, CARD has sold 110 units of different solar PV models to BRECDAs in Maguindanao, and is poised to expand operations through partnerships with BRECDAs Zamboanga Peninsula, Sulu, Basilan and Tawi-Tawi.

A resident from a village at the North Cotabato border inspects the solar PV product that he plans to buy from the Magsaysay BRECDA for selling in his own village.

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Head Office Unit 68 6/F Landco Corporate Center J.P. Laurel Avenue, Ba jada, Davao City 8000 T/F: (63 82)2822517 Satellite Office 2401 Jollibee Plaza Bldg., F. Ortigas, Jr. Road Ortigas Center, Pasig City 1600 T: (63 2)6879283/6321233 F: (63 2)6312809 www.amore.org.ph This publication is made possible by the support of the American people through the United States Agency for International Development.

The contents are the responsibility of Winrock International and do not necessarily reflect the views of USAID or the United States Government.

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