Government eyes $25 billion investment to boost energy sector

MANILA, Philippines — The country aims to unlock up to $25 billion in investments from a coalition of global investors as the government rallies to secure the entire funding to power the energy sector.

“Of course, if we can get the total of $25 billion, we should aspire for that,” Energy Secretary Raphael Lotilla said at the renewable energy forum organized by the Economic Journalists Association of the Philippines and Aboitiz Power Corp. held at the Securities and Exchange Commission (SEC) headquarters in Makati.

The Philippines has been chosen by the Coalition for Emerging Market Infrastructure Investment (CEMII) as its initial focus market, given the country’s growing energy demand and ambitious renewables targets.

The coalition dedicated to mobilizing infrastructure investment across the Indo-Pacific Economic Framework is expected to help enable capital to be deployed quickly and at scale for the Philippine energy sector.

With CEMII’s entry into the country, the Department of Energy (DOE) and the coalition will engage in high-level meetings to explore mutual areas of interest and develop a joint roadmap to accelerate investment in clean energy infrastructure.

“But as I said, it also involves our readiness and the readiness of the energy sector. All the elements should be there,” Lotilla said.

He said the transmission operator, generation companies and distribution utilities must work hand in hand to help drive investments that could bolster the country’s energy transition.

Under the Philippine Energy Plan, the government wants to expand the share of renewables in the energy mix to 35 percent by 2030 and 50 percent by 2040.

To achieve these targets, the DOE said, the country needs to secure up to P31 trillion in clean energy investments by 2040.

The DOE has partnered with the Bangko Sentral ng Pilipinas (BSP) and the SEC for the issuance of guidance on the financing of excluded activities and coal-fired power plant projects.

In a memorandum dated Sept. 27, the BSP said banks may “indeed grant loans to finance the needs of existing and operational coal-fired power generation facilities, or any new coal-fired power projects that are considered by the DOE as committed projects.”

The energy department imposed a coal moratorium late in 2020, halting the development of all greenfield coal-powered generation facilities.

The DOE said, however, that the policy is not a “total ban,” as this does not cover existing and operational power plants or those that are already committed.

“Our energy transformation journey involves the availability of innovative financial solutions and access to transition finance,” Lotilla said. “Now, the energy transition is, as I have noted, filled with uncertainty, and it is our duty to lay the groundwork for preparedness to adjust one way or another.”