Republic of the PhilippinesDEPARTMENT OF ENERGY

07 December 2OLI

MR. MILO N. TANCHULINGSecretory-GeneralFreedom from Debt Coalit ionL1 Mat impi in StreetBarangay Pinyahan, Quezon City

Subject: Electr ic Tricycle (E-Trikes) Program

Dear Sec.-Gen. Tanchul ing:

Thank you for your interest in the Electr ic Tricyle (E-Trike) program of the Department.

The e-Trike program is in l ine with the Department's thrust to encourage the use of non-tradit ional fuels in transportation. We are currently working on a variety of projects in l ine withth is , inc lud ing the prov is ion of a natura l gas p ipe l ine ( for both t ranspor tat ion and power) ,mixed fuel buses, and broader testing for LPG for jeepneys. We are also working closely withthe private sector to encourage the further development of the e-Vehicles market in thecountry.

We understand your concerns, and we t rust the fo l lowing wi l l a l lay them.

I. CONDUCT OF PUBUIC CONSULTATIONS

Manufocturers ond other industry ployers-

In l ieu of a formal public consultation with the manufacturers, we have been directlycoordinating with a variety of electr ic vehicles companies in the country. We have alsodeal t wi th var ious e lect r ic vehic le manufactur ing organizat ions, and v is i ted the i r p lants .

The Asian Development Bank (ADB) a lso has,consul ta t ion meet ings wi th the in terestedmanufacturers every two weeks

Energy Center, Merritt Rd., Fort Bonifacio, Taguig City, Metro Manila, 1632 PhilippinesTel. Nos.: Trunkline (632) 840-1401 to 21; Telefax (632) 840-2067; (632) 840-2138', (632) 840-4244; Hotline (632) 840-2130

Website: www.doe. gov. ph, E-mail : info@doe. gov.ph

/ Loca I Gov e rn m e nt U n its-

We have been consult ing with the Local Government Units with exist ing e-Trikeprograms such as Palawan, Surigao and Mandaluyong regularly. We have worked mostclosely with Mandaluyong, for logist ical purposes.

Moving forward, we held a consultation meeting on October 18, 2011 with our targetLocal Government Uni ts for the p lanned in i t ia l ro l lout .

II . REALLOCATION FROM SOLAR FUNDING

The reallocation of funds from the solar projects is based on both the lowered instal ledcapacity targets for solar, and the increased private investor interest in the developmentof solar.

Kindly note that the solar project planned by the ADB was a residential rooftop solarpaneling project with a projected capacity of 100MW. With the instal led solar capacitytargets currently pegged at only 50MW, and the current applications with theDepar tment for so lar , we decided i t would be inappropr ia te for the government tocompete with private interests.

II I . ON E-TRIKE FINANCING TRANSPARENCY

The decis ion on how to deploy the e-Tr ike f inancing is not wi th in the Depar tment 'sauthor i ty but under the Asian Development Bank (ADB). ADB's loan is developmenta l innature and it wil l be al located to projects which the private insti tut ions are not toomuch inc l ined to invest in at the moment . There are a l ready a lo t o f people who arewi l l ing to invest in to so lar as ev idenced by the overwhelming push for the sa idtechnology. ADB decided to put the i r funds in to more t ra i lb laz ing in i t ia t ives. However ,they are also not closing their doors and if satisf ied with some of the developments inthe so lar industry , ADB wi l l cont inual ly push i t through.

The basic problem the ADB is currently facing regarding solar technology is that theythemselves have a l ready purchased solar panels for the i r headquar ters in MandaluyongCity and they are buying the energy produced at a rate that is much lower than theproposed feed-in tari f fs. The funding is being shifted by ADB from one project toanother pro ject which they fee l is much more economical and has greater impact andmore t ransformat ional . l t is the ADB's pol icy dec is ion on how to ut i l ize the funding andthe question of i ts transparency rests with the ADB's better judgment. However, asearl ier stated, we observe that ADB has been continuously consult ing with stakeholdersin paral lel with the DOE's close coordination with LGUs, tr icycle drivers and otherre levant s takeholders. rr

IV. BRIEF OVERVIEW OF THE E.TRIKE PROJECT

The e-Trike project is intended to provide affordable f inancing for the acquisit ion ofl i thium ion e-Trikes. l t is l ikewise intended to improve the capacity of local industry bycreat ing a substant ia l demand, thus causing a need for added supply .

The Project targets approximately 100,000 e-Trikes within 5 years, with an init ial rol loutof 20,000 units in the f irst 2-3 years. Lithium ion was the chosen power source by theADB over lead acid batteries as l i thium ion is LOO% recyclable. Nonetheless, we intendto require al l bidders to provide proper col lection and disposal/recycl ing in their bids.

Regrettably, the Project documents on the implementation afe not completed, as weare sti l l undergoing NEDA Technical Assessment, and thus are st i l l subject to theircomments and recommendat ions.

Should you have any further questions, feel free to contact our off ice at telephonenumbers (O2l840-2236 or the DOE trunkline at 479-2900local 342.

Thank you.

Very truly yours,

LZRETN,F. AWON, CESOUndersecretary

cc:

I

vSecretary Jose Rene D. AlmendrasDOE .