THE Asian Development Bank has approved a $31.1- million loan that will allow the government to provide for free 13 million energy-efficient compact fluorescent lamps to households nationwide in exchange for their energy-wasting incandescent bulbs.

It says the lamps will save the Philippines about $100 million or P4.6 billion a year in fuel costs, allowing it to defer investing $450 million or P20.7 billion to increase power plant capacity.

Each lamp will save a household around $8.50 or P390 in power consumption cost each year over the next seven to 10 years, the bank says.

The bank says the loan is justified because only 20 percent of the electricity used by an incandescent bulb produces light. The remaining 80 percent is wasted as heat.

By contrast, a compact fluorescent lamp uses all of its electricity input to produce light. And while an average incandescent bulb?s life is only about 800 hours, the compact lamps replacing them will have a life of 10,000 hours with a two-year warranty.

The Energy Department is tasked to handle the switch to the compact lamps under the so-called Philippine Energy Efficiency Project. It will also retrofit government office buildings and public lighting systems with efficient lighting systems.

At the same time, the government will put up an energy service agency that will provide financial and technical support to schools, hospitals, government buildings, and all private institutions planning to reduce their energy consumption.

Sohail Hasnie, senior energy specialist in the bank?s Southeast Asia Department, says that if one million incandescent bulbs are replaced with efficient compact lamps at a cost of about $1.5 million, the electricity demand will be reduced by about 50 megawatts.

The impact on the power system will be the same as building a $50-million, 50-megawatt power station, which will take three to four years to build and $2 million to $3 million each year to operate, Hasnie says.

And as a result of the lower greenhouse gas emissions, the project will create carbon credits for the Philippines under the Clean Development Mechanism. Its success will also encourage the private sector to invest in energy-efficient lighting.

The bank says it is extending the loan from its ordinary capital resources to the Philippine government, and that the loan is payable in 25 years.

The Asian Clean Energy Fund, established by the Government of Japan, will provide a grant of $1.5 million under the Clean Energy Financing Partnership Facility, while the Philippine government will provide $13.9 million to the project. Roderick T. dela Cruz