Trust accounts set up for ER 1-94 host communities

Host communities can expect better and faster access to subsidies from the Energy Regulations 1-94 (ER 1-94) Program after the Department of Energy (DoE) and Landbank of the Philippines (LBP) agreed to establish trust accounts.

The move, governed by a Memorandum of Understanding (MOU) signed by DoE Undersecretary Rowena Cristina L. Guevara and LBP Senior Vice President Althon C. Ferolino, aims to streamline the process for host communities, especially those in remote areas near small hydropower plants and newly established energy facilities.

“Setting up a trust account is a crucial step for these host communities to access and utilize these funds. 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,” Undersecretary Guevara said on Tuesday.

Essential for accessing funds

The trust accounts are essential for accessing funds generated through the ER 1-94 Program, which requires energy companies to contribute one centavo per kilowatt-hour of generated power to support local development.

While many barangays, indigenous peoples, and indigenous cultural communities (ICCs) have struggled to set up the required accounts, the partnership between the DoE and LBP is designed to simplify this process and ensure these communities can access funds that will drive economic, and social, and environmental progress.

Under the new MoU, the LBP will assist host communities in setting up trust accounts and waive service charges for accounts with balances below the required minimum.

The provision aims to ensure that financial services remain accessible to all, particularly those communities facing financial challenges.

Special arrangement

The LBP has also committed to promoting this special arrangement across its network of 607 branches and branch-lite units nationwide to ensure widespread awareness and participation.

“With LBP as our partner, assisting local leaders and community representatives in understanding the account setup process and requirements is essential to ensure that they can manage and use the funds effectively for sustainable development and social welfare,” Guevara added.

The ER 1-94 Program allows host communities to benefit from three types of interest-bearing current accounts: The Development and Livelihood Fund, the Reforestation, Watershed Management, Health, and Environment Enhancement Fund, and the Electrification Fund.