=== dc2009-07-0010-pages-01.ppm === Republic of the Philippines DEPARTMENT OF ENERGY JUL 42 2008 DEPARTMENT CIRCULAR NO. _DC2G09-07 -0010 GUIDELINES FOR THE ACCREDITATION OF MANUFACTURERS, FABRICATORS AND SUPPLIERS OF LOCALLY-PRODUCED RENEWABLE ENERGY EQUIPMENT AND COMPONENTS WHEREAS, Republic Act No. 9513, otherwise known as the “Renewable Energy Act of 2008” (Act) provides that it is the policy of the State to increase the utilization of renewable energy resources such as, but not limited to, biomass, solar, wind, hydropower, geothermal, and ocean energy sources, and including hybrid system by institutionalizing the development of national and local capabilities in the use of renewable energy systems, and promoting its efficient and cost-effective commercial application by providing fiscal incentives; WHEREAS, the Implementing Rules and Regulations (IRR) of the Act mandates the Department of Energy (DOE) to provide the guidelines for tne accreditation of manufacturers, fabricators and suppliers of locally-produced RE equipment and components for purposes of availment of fiscal incentives; NOW, THEREFORE, in consideration of the foregoing premises, the DOE hereby issues the following guidelines: SECTION 1. Title. - This Circular shall be known as the “Guidelines for the Accreditation of Manufacturers, Fabricators and Suppliers of Localiv- Produced Renewable Energy Equipment and Components." SEC. 2. Scope. - This Circular shall govern the registration of renewable energy {RE} manufacturers, fabricators and suppliers of jocally-produced RE equipment and components and the issuance of Certificate of Accreditation for the availment of incentives under the Act. SEC. 3. Incentives for Manufacturers, Fabricators and Suppliers. — Withovt prejudice fo any other requirements as may be imposed by other agencies _ tasked with the administration of incentives under the Act, all existing and new manvfacturers, fabricators and suppliers of locally-produced RE equipment, parts and components shall. be required to obtain an accreditation with the DOE through Renewable Energy Management Bureau (REMB] in order to enjoy any of the incentives as provided for under Section 21 of the Act. 7 Energy Center, Merritt Rd., Fort Bonifacio, Taguig City, Metro Manila, Philippines 5 Fax # 812-61-4 Tel. # 840-20-08 Fax # 840-21-38 Tet # 840-22-36 Fax # 840-17-31 Tel # 817-86-03 Trunkline 4793-29-00 Website: www.doe.gov.ph, E-mail: info@doe.gov.ph _—. a) === dc2009-07-0010-pages-02.ppm === SEC. 4. Who May Apply. - Any person, natural or juridical, registered and/or authorized to operate in the Philippines under existing Philippine laws and engaged in the manufacture, fabrication and supply of locally-produced RE equipment and components may apply for accreditation with the REMB. SEC. 5. Application Requirements. — All applications for DOE Certificate of Accreditation shall be made in writing and must be verified. The applicant must submit the following documents: a a. Letter of Application addressed to REMB Director: b. Company Profile or Business Background -— must show proof of good standing, i.e., demonstrate full compliance with the pertinent rules and reguiations governing the applicant's business; c. A copy of Articles of Incorporation from the Securities and Exchange Commission {SEC} or a Certificate of Registration from Department of Trade and Industry (DT!) for single proprietorship; d. Nature and Scope of RE activities (RE manufacturing, fabricatna, ana/or supplying of locally-produced RE machineries, equipmen. components and parts}; e. Appropriate Business Permit in the name of the Company or proprietor - that it must be actively engaged in the business involving simicr activities applied for accreditation, including certified copy of Bureau of Internal Revenue (BIR) Registration; f. Proof of technical, financial and physical or logistical capabilities to handie RE equipment, machinery, components and parts appropriate and commensurate to the scope of activity applied for accreditation: g. Track record, if applicable; and h., Such other documenis as may be "equired by the REMB. SEC. 6. Processing and Approval of Application. - The application for accreditation shall be granted by the DOE upon evaluation that the applicant has complied with all the requirements specified above. The processing period for any application for accreditation shall be within thirty (30) days from the date of submission of complete requirements to the REMB. No application for accreditation shall be accepted without due payment of application and processing fees. === dc2009-07-0010-pages-03.ppm === In case of incomplete application requirements, the REMB shall, within fifteen (15) days from receipt of application, notify the applicant, in writing, to coreci the deficiency. if the applicant fails to correct the deficiency within fifteen (15) days from receipt of the notice, the application shall be deemed to have been abandoned. SEC. 7, Obligations of Accredited RE Manufacturers, Fabricators and Suppliers. — The DOE-accredited manufacturers. fabricators and suppliers of locally- produced RE equipment, parts and components shall comply with the terms and conditions set forth in the Certificate of Accreditation, in addition to the following: a. Comply with pertinent government rules and regulations including, but not limited to, payment of taxes, environmental protection, safety, as a requisite for availment of and continuous enjoyment of incentives under the Act: b. Submit reports on the importation, local purchases, sales, and inventory, among others, in relation to accredited RE activities (manufacturing, fabrication, and supply of locally-produced RE machineries, equipment, components and parts}: c. Adhere to standards, or in its absence, to indusiry-accepited norms and practices in the manufacture, fabrication or supply of RE machineries, equipment and componenis; d. Allow DOE personnel, at all reasonable time, full access to its facilities, books of accounts and other pertinent records relative to its business operation; and e. Shall not assign, transfer, dispose or otherwise convey its interest acquired under the DOE accreditation. SEC. 8. Period of Validity. - The DOE Certificate of Accreditation for RE manufacturers, fabricators and suppliers of locally-produced RE machineries, equipment, components and parts, shail be valid for a period of three (3) years from daie of its issuance unless earlier revoked or cancelled by the DOE through REMB on valid grounds. The Certificate of Accreditation shall be renewable every three (3) years, subject to compliance with the requirements. SEC. 9. Revocation or Cancellation of Certificate of Accreditation. — The DOE may, motu proprio or upon filing of any complaint, revoke or cancel any Cenificate of Accreditation following the provisions of Department Circular No. 2002-07-004 or the "Rules of Practice and Procedure of the Department === dc2009-07-0010-pages-04.ppm === of Energy” due to, among others, failure of any of the accredited manufacturer, fabricator and/or supplier to comply with its obligations as provided in Section 6 hereof and the terms and condifions under which the accreditation was issued. SEC. 10. Separability Clause. ~ If for any reason, any provision of this Circular is declared unconstitutional or invalid, the other parts or provisions not affected _._.....___ thereby shall remain in fullforce and effect. =. _ SEC. 11. Repealing Clause. - The provisions of other department circulars which are inconsistent with the provisions of this Circular are hereby repealed, amended or modified accordingly. SEC. 12. Effectivity. ~ This Circular shall take into effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation. Issued this 12' day of July 2009 in Fort Bonifacio, Taguig City, Metro Manila. Cio, ANGELO T. REYES Secretary rr Republic af the Paitppioes ‘ a DEPARTMENT OF ENERGY SE09-04 (4392 sin === dc2009-07-0010-pages-05.ppm === ACCREDITATION PROCESS OF RE MANUFACTURERS FABRICATORS AND SUPPLIERS (R.A. No. 9513 Jou Applicant prepares Applicant submits application letter with necessary accreditation requirements addressed to REMB the necessary documentary requirements as prescribed by the DOE depending on REMB checks the the nature of completeness of accreditation business/activities requirements within 15 days from receipt of application intended for accreditation. REMB notifies applicant to complete the requirements within 15 days from receipt of notice Is the documentary requirements Complete? Are requirements completed within 15 days? REMB issues order of payment of Application Fee to Applicant Has the application fee been paid? Applicant deems to have withdrawn its application for accreditation === dc2009-07-0010-pages-06.ppm === REMB processes the application within 30days from date of completion of requirements “~~~ Does the applicant comply with accreditation requirements? REMB rejects the application and notifies the applicant DOE grants the Certificate of Accreditation and notifies the applicant DOE Certificate of Accreditation Note: The DOE Certificate of Accreditation shall be valid for three (3) years unless earlier revoked or cancelled for valid grounds. It shall be renewable for the same period subject to compliance with the terms and conditions of the certificate. === dc2009-07-0010-pages-07.ppm === REGISTRATION PROCESS OF RENEWABLE ENERGY DEVELOPER (R.A. No.9513 DIRECT NEGOTIATION RE Applicant J oL submits RE RE Applicant prepares the necessary legal, financial and technica! documents and fills out RE Application Form. REMB checks the completeness of RE Application against the prescribed checklist REMB notifies RE Applicant to complete submission within 30 davs from receipt of notice. Is RE Application Complete? If there are two (2) or more RE Applications, REMB shall endorse to Review Committee the application it has received first. The REMB issues order of Review Committee payment to RE Applicant to shall determine the pay Application Fee completeness of submission. Order of payment shall be issued only when the submission is complete. Is RE Application completed within 30 days? Has the Appheation Fee been paid? DOE posts RE Application in its website REMB disqualifies the RE Apphcant and sends notice of disqualification within 5 days from receipt of payment === dc2009-07-0010-pages-08.ppm === DOE evaluates the RE Application and negotiates the terms and conditions of the RE contract within 120 days REMB disqualifies the RE Applicant Is the RE Application compliant with all the requirements? and sends notice of disqualification The Review Committee shail determine first if the RE Applicant is legally qualified before evaluating the technical and financial criteria of the application. Review Committee Recommends to the DOE Secretary the Award RE Contract If the RE Contract is in the nature of DOE Certificate of Registration DOE advises the RE FTAA, the Applicant of the Schedule of President shal] Signing of RE Contract award and execute the RE Contract upon recommendation by the DOE Secretary DOE issues the Certificate of Registration to RE Developer upon Effectivity of the RE Contract DOE Awards and Parties sign the RE Contract Note: Submission of a Letter of Intent and/or an RE Contract Application Form only without attaching legal, technical and financial documentary requirements shall not be considered as a submission of an RE Application. === dc2009-07-0010-pages-09.ppm === REGISTRATION PROCESS OF RENEWABLE ENERGY EVELOPER (R.A. No.9513 OPEN AND COMPETITIVE SELECTION RE APPLICANT = RE Applicant prepares the necessary legal, financial and technical documents and fills out RE Application Form. The Review Committee shall determine first if the RE applicant is qualified or has passed the legal requirements before evaluating the technical and financial criteria of the proposal. The penod of evaluation shall be set on the specific selection process based on the number of areas offered, type of RE resources, among others. DOE Posts/Publishes the Notice of Invitation for RE Project Proposal __ RE Applicant submits RE Proposal to REMB REMB checks the completeness of RE Proposal against the prescribed checklist REMB returns the documents is RE Proposal Complete? unopened ta the RE Applicant REMB issues order of payment to RE Applicant to pay Application Fee REMB disqualifies the RE Applicant and sends notice of disqualification Review Committee determines if the RE Applicant is legally qualified === dc2009-07-0010-pages-10.ppm === Has RE Applicant passed the legal requirements? REMB disqualifies the RE Applicant and sends notice of Review Committee evaluates the technical and financial criteria Is the RE Proposal accepted? REMB disqualifies the RE Applicant and sends notice of disqualification REMB notifies RE Applicant and advises to pay processing fee If the RE Contract is in the nature of FTAA, the President shail award and execute the RE Contract upon recommendation by the DOE Secretary Review Committee Recommends to the DOE Secretary the Award of RE Contract DOE advises the winning RE Applicant of the Schedule of Signing of RE Contract disquatificatia if there are two (2) or more RE Proposals which have passed the legal requirements, they shall be evaluated simultaneously based on their technical and financial criteria. The Review Committee shal recommend the award of the RE Contract to the one with the best offer. DOE Certificate of Registration DOE issues the Certificate of Registration to RE Developer upon Effectivity of the RE Contract DOE Awards and Parties sign the RE Contract === dc2009-07-0010-pages-11.ppm === CONVERSION FROM PRE-DEVELOPMENT STAGE TO DEVELOPMENT/COMMERCIAL STAGE OF AN RE CONTRACT (R.A. No.9513) RE DEVELOPER RE Developer submits Application for Conversion and ee es Commerciality RE Developer prepares the necessary permits, financial and technical documents and fills out RE Application Form. REMB checks the completeness of requirements REMB notifies RE Developer to Is the application Complete? complete submission. F REMB and Financial Services evaluate financia} and technical aspects of the RE project REMB notifies RE Developer to Is the RE Project viable? address concems A Sst === dc2009-07-0010-pages-12.ppm === DOE issue Confirmation of Commerciality and negotiate the terms and conditions of the RE Development Service Contract REMB, with the assistance of Legal and Financial Are the terms and conditions accepted? Services, renegotiates the contract with RE Developer REMB recommends to ' the DOE Secretary the conversion of RE Contract If the RE Contract DOE advises the RE Developer is in the nature of on the Signing of Development’ FTAA, the Commercial RE Contract President shal! award and execute the RE Contract upon Parties sign the recommendation Development/Commercial by the DOE RE Contract Secretary RE Project under Development/ Commercial RE Contract Note: The DOE Certificate of Registration issued to RE Developer during the effectivity of the Pre-Development RE Contract shall remain valid upon approval of conversion. Said certificate shall continue to serve as a proof of entitlement of incentives under R.A. No. 9513 unless otherwise automatically revoked or cancelled due to termination of the RE Contract. === dc2009-07-0010-pages-13.ppm === CONVERSION OF EXISTING SERVICE CONTRACT/AGREEMENT ON RE RESOURCES TO RE CONTRACT UNDER R.A. No. 9513 APPLICANT Applicant prepares the necessary documentary requirements as prescribed by -+-the-DOE including-its accomplishment report vis-a- vis work and financial commitments and updated work program, and taking into account such factors as type of RE resource, and remaining term of contract/agreement, among others. Applicant submits application for conversion or letter of intent with ali necessary documents to REMB REMB acknowledges receipt of apphcation and advises the applicant of the schedule of negotiation REMB, with the assistance of Financial and Legal Services. negotiates with the applicant the terms and conditions of RE Contract. The negotiation period shail not exceed 120 days. REMB shall reject the application and advises the applicant on the grounds for rejection. Is negotiation successful? Holder of existing contract/ agreement shall continue to operate its RE project within the remaining term under the old regime. REMB recommends approval for conversion of contract/agreement to RE Contract to the DOE Secretary === dc2009-07-0010-pages-14.ppm === If the RE Contract is in the nature of FTAA, the President shall award and execute the conversion of existing service Upon approval by the Secretary, REMB notifies the applicant of the approval and the schedule of t-stenmng of RE Contract ——— contract to RE Contract upon recommendation by the DOE Secretary DOE Secretary awards the conversion and the parties sign the RE Contract Once the holder of the existing service contract/agreement was issued a DOE Certificate of Registration as an RE Developer, the RE project shall be governed by R. A. No. 9513 (Act). RE Developer shail continue to avail of the incentives except those which have been modified or withdrawn by the Act. DOE issues the Certificate of Registration to RE Developer upon Effectivity of the RE Contract DOE Certificate of Registration === dc2009-07-0010-pages-15.ppm === ANNEX “A” Application No. O.R. No. Date Amount RE SERVICE/OPERATING CONTRACT APPLICATION FORM II. A. B, C. . RE Sector of interest: (Republic Act No. 9513) GENERAL INFORMATION Name of Applicant: Authorized Representative: Business Address/ Tel./Fax Nos. /Email Address: Area or Block/s No. and Location applied for: Approximate area covered (in has or sq. m): . Brief description of primary and secondary purpose as authorized by its Articles of Incorporation (for juridical person only): COMPANY/BUSINESS BACKGROUND A. Controlling Stockholders (for corporation only) B. (List names of majority stockholders and the percentage of their holdings) a) - % bho c) - % d) -_. % e) - % Company Directors and Officers (List of Board Members and Company Officers) NAME / - POSITION === dc2009-07-0010-pages-16.ppm === b) c) d) e) C. Parent/Subsidiary / Affiliates (List Names, Addresses and Nature of Business) a) b) —ooe""“D No. of Years in Operation: — II. IV. E. Description/History of the Company / Business: I. Organizational structure 2. Ownership structure 3. Field of specialization TECHNICAL AND FINANCIAL CAPABILITIES A. Key Personnel in the Organization 1. Corporate officers/hierarchy / expertise 2. Staff members/ experience B. List of On-going or Completed RE or Energy-Related Contracts / Agreements 1. Brief description -. Type of energy resource 3. Location 4, Contract term/implementation period 5, Client C. Latest Financial Statements 1. Income Statement 2. Balance Sheet CERTIFICATION: It is certified that the foregoing information are true and correct. It is understood that any omission or misinterpretations of the required information shall be sufficient cause for the rejection of this application. Date Duly Authorized Representative Name of Applicant === dc2009-07-0010-pages-17.ppm === I. ANNEX “B” CHECKLIST OF REQUIREMENTS (Renewable Energy Service/Operating Contract under R.A. No. 9513) RE Contract Application/Proposal a A. Legal Requirements 1. Individual or Single Proprietorship: a. Birth Certificate - duly authenticated by National Statistics Office (NSO); b. Business Permit - certified true copy; and c, Department of Trade and Industry (DTI) Registration (if applicable). 2. Corporation/Joint Venture/Consortium a. Securities and Exchange Commission (SEC) Registration - SEC-certified; b. By-Laws and Articles of Incorporation - SEC-certified; c. Certification authorizing its representative to negotiate and enter into RE Contract with the DOE; Business Permit; Controlling Stockholders and Percentage of their Holdings; Organizational Chart of the Company; Parent/Subsidiary / Affiliates (if applicable); and Company Profile. Tone p B. Technical Requirements Track Record or Experience; Work Program with financial commitment per activities; Curriculum Vitae of Management and Technical Personnel; List of Technical Consultants with corresponding Contract between the Developer and Consultants showing their respective qualifications; and 5. List of existing company-owned and leased equipment appropriate for the RE project with corresponding description. mene === dc2009-07-0010-pages-18.ppm === C, Financial Requirements 1. Audited Financial Statement for the last two (2) years and unaudited Financial Statement if the filing date is three (3) months beyond the date of the submitted Audited Financial Statement; 2, Bank certification to substantiate the cash balance (exact amount in = words and numbers}, —__---___ a eens omnes Il. 3. Projected cash flow statement for (2) years; and 4, For newly-organized or subsidiary corporation with insufficient funds to finance the proposed work program, it shall submit an Audited Financial Statement and duly certified and/or notarized guarantee or Letter of Undertaking/Support from its parent company or partners to fund the proposed Work Program. In the case of foreign parent- company, the Audited Financial Statement and the guarantee or Letter of Undertaking/Support shall be duly authenticated by the Philippine Consulate Office that has consular jurisdiction over the said parent company. D. Other Requirements 1. Letter of Intent/ Application; Duly accomplished RE Contract Application Form; 3. Map showing the applied area (RE area of application: in case of ocean, solar, wind, and geothermal, must conform with the DOE Blocking System); 4. Application/Processing fees; and 5. Draft Pre-Development or Development/Commercial Service Contracts. N Requirements for Conversion from Pre-Development Stage to Development/Commercial Stage 1. 2. Letter of Declaration of Commerciality declaring the RE project is commercially feasible and viable; and Feasibility study and/or detailed engineering design of the RE project with the following corresponding documents: a. Resolution of Support from host communities and host municipality / ies; b. Proof of Public Consultation; c. Any form of legal documents showing the consent of the landowner if the project falls under a private land; === dc2009-07-0010-pages-19.ppm === Hl. d. Department of Environment and Natural Resources (DENR) Permits: i. Environmental Impact Study ii. Environmental Compliance Certificate (ECC) or Certificate of Non-Coverage (CNC) iii, Forest Land Use Agreement (FLAg)/ Special Land Use Agreement (SLUP) for area applied in public domain _e._National Commission on Indigenous Peoples (NCIP): Free and _ i es Prior Informed Consent (FPIC)/ Certificate of Pre-Condition or Certificate of Non-Overlap; National Transmission Corporation (TRANSCO): i. Grid System Impact Study ii. Interconnection Agreement, if applicable Energy (Electricity) Sales Agreement, Other clearances from other concerned agencies (i.e., Maritime Industry Authority (MARINA), Bureau of Fisheries and Aquatic Resources (BFAR), Philippine Navy, Philippine Coast Guard, etc.); Proof of Financial Closing; Final area for development (geographical coordinates /PRS92); k. Payment of corresponding Application/ Processing Fee; and , Draft Development/ Commercial RE Contract. Requirements for Conversion from Existing Contracts to RE Contracts 1. ad Letter of Intent from the Developer requesting for the conversion of the existing Contract/ Agreement to RE Contract; Accomplishment report vis-a-vis work and financial program; Updated Work Program, and Such other documents that may be required by the DOE.