"We are looking at various renewable energy projects to fund, and proposals that come in should focus on building power sources that promote the use of new and renewable energy sources such as geothermal, wind and hydropower, among others," said DBP president Reynaldo David.
DBP’s credit facility supports the Department of Energy’s (DOE) push for the development of renewable energy sources and wean the country from its dependence on expensive imported oil.
Energy Undersecretary Peter Anthony Abaya earlier warned of an oil-induced economic slump by 2008 unless the government aggressively pursues alternative energy projects.
Abaya said the DOE should, among others, increase the country’s production of indigenous oil and gas reserve, hydropower, biomass, solar and wind energy sources.
He noted that during the rainy season only three percent is used for power. On the other hand, the Philippines has 76,000 megawatts of wind potential compared to the US with a wind capacity of only 7,000 MW.
The DOE is also pushing for a coal liquefaction project that involves the conversion of the country’s low-grade coal into fuel oil.
"If this project is a success, the Philippines can be the refinery hub for the expansion of coal to fuel source in Southeast Asia," said Abaya, adding that the potential sites for this facility include Bataan, Batangas or Cavite provinces.
A study on Philippine coal conversion to crude oil, diesel and unleaded gasoline was recently completed by US technology firm Hydrocarbon Technology Innovations Group (HTIG) and the Headwaters Corp.
HTIG signed last February a memorandum of understanding (MOU) with the DOE for the establishment of a 50,000 barrel per day coal-to-fuels conversion facility in the country.
HTIG will establish in the Philippines a 25-kilogram per day pilot plant to study and determine the feasibility of converting the country’s indigenous coal to liquid fuel.
If feasible, commercial operations would start with the establishment of a 50,000-70,000 barrels per day fuel-producing plant.
The project according to Abaya, will drastically cut the country’s dependence on expensive imported fuel costs as well as boost the use of indigenous coal which have long been considered as unsuitable for power plant use.
Moreover, four groups expressed keen interest in extracting oil from the Malampaya natural gas fields in northwest Palawan.
These groups have the financial muscle and the technology to extract the estimated recoverable 40 million barrels of oil from Malampaya. The groups include the Houston-based ARGO Group, Norskidrow, a Norwegian company and two other foreign companies.
"What is critical right now is for the project to push through especially as crude prices in the world market continue to rise and does not seem to be tapering off. The bottomline is for government to take the initiative to jumpstart the project if the consortium operating the Malampaya gas field won‚t do it," said Abaya.
The Philippines, he said which imports 98 percent of its oil requirements, is spending billions of dollars to purchase oil and having part of it produced locally will provide some respite from surging prices of crude in the world market.
The country’s oil import bill for the first five months of the year has increased by 27.2 percent to $2.3 billion from $1.8 billion despite the notable decline in the demand for oil by 8.6 percent the same period a year ago.