NPM 129-2012

Requesting Entity: Climate Change Commission (CCC)

Issues Concern: Engagement of Energy Service Companies (ESCOs)



What is the proper procurement method and financing scheme for the implementation of the Sustainable Energy Efficiency Program (Program), which will entail no initial cost to the government since it will be implemented in partnership with ESCOs, which shall provide the project expenses?

[I]f an acquisition does not involve expenditure of funds in relation to an identified appropriation, RA 9184 and its revised IRR do not apply. In line with this, Section 4.4 of the revised IRR states that it shall not apply to activities involving public-private sector infrastructure or development projects and other procurement covered by RA 6957, as amended by RA 7718, except those portions financed by the government.

In case of projects where the government entity partners with the private sector entity, where the latter shoulders the cost or where the former is set to earn or profit rather than spend public funds, commonly termed as Public-Private Partnership (PPP), it is advisable to look into the applicability of the BOT Law or EO 423 relative to the Guidelines and Procedures for Entering into Joint Venture Agreements Between Government and Private Entities (JV Guidelines).

[C]onsidering that the project expenses for the Program will be provided by the ESCOs, or through some banking facilitations, instead of the government entity concerned, we are of the view that the implementation of the Program, including the selection of partners and financing scheme therefor, may be most appropriately conducted following PPP-related laws, rules, and regulations, such as BOT Law or JV Guidelines.