The Department of Energy (DOE) and the Land Bank of the Philippines have signed a memorandum of understanding (MOU) aimed at improving the distribution and utilization of funds for communities hosting energy projects, particularly those benefiting from the Energy Regulations (ER) 1-94 program.
In a statement, the DOE said the MOU, signed in October by undersecretary Rowena Cristina Guevara and Land Bank senior vice president Althon Ferolino, established a dedicated trust account for host communities. The initiative is designed to streamline the process for local beneficiaries—many of them in remote areas—gaining access to critical financial resources to support community development.
The ER 1-94 program mandates energy generation companies to contribute one centavo for every kilowatt-hour of generated electricity to fund projects that support social, economic, and environmental progress in the communities hosting energy facilities, such as small hydropower plants. However, many localities, especially those in far-flung areas, still lack operational trust accounts to access these funds.
Guevara said that setting up these accounts is vital for ensuring that host communities benefit from the ER 1-94 contributions. “Without an operational trust account, these communities may miss out on valuable support for local projects that could enhance infrastructure, education, health, and livelihood opportunities.”
To address this, Land Bank will assist communities in setting up the necessary accounts and help local leaders understand the process. The bank will also waive service charges for accounts with balances below the required minimum to ensure that financial services remain accessible to all host communities, regardless of their financial standing.
With this partnership, the DOE and Land Bank aim to enhance the sustainable development of energy host communities and ensure that they receive the full benefits of the ER 1-94 program.
