Philippines to open geothermal energy development to 100% foreign ownership
The Philippines Department of Energy is to open foreign majority ownership into renewable energy development with a focus on geothermal to attract foreign investment into development.
Under current law, foreign entities cannot own a majority stake in renewable energy development in the Philippines, but this is about to change, as reported by the Manila Bulletin.
The Philippine government, through the Department of Energy (DOE), is advancing a policy re-casting that will allow full or 100-percent foreign ownership in renewable energy (RE) projects.
The current arrangement requires a 60% majority equity by Philippines interest in the project companies. This has been a hurdle for investment and always seen as obstacle to attract foreign investment into renewable energy development in the country.
With the current economic circumstances, Energy Secretary Alfonso G. Cusi disclosed that one of the policy re-alignments he will push for is allowing full entry of foreign investors in the RE sector.
“I’m looking at allowing 100-percent investment or ownership in renewables,” the energy chief stated at the “Innovation in Energy” forum of the Philippine Energy Independence Council (PEIC), emphasizing that while the main focus at this point is on geothermal, he is advancing that policy modification to actually cover all RE technologies.
Cusi reiterated that while the Philippines’s dominance on geothermal energy development had already been slithering from the country’s grip, which he considers a ‘regretful development’, he noted that his target is for the government to pick up the pieces and then strengthen capital funneling in that sub-segment of the energy sector.
A parallel policy fortification that the DOE has been sorting out is extending the duration of RE service contracts that shall be awarded to investors. RE service contracts currently have a tenor of 25 years and could be renewed for another 25 years, subject to terms and conditions.
“Another that I am looking at changing the policy – to help in reducing the tariff, is probably for new contracts to be given a longer period but with a lower return,” he said, adding that these parameters are being currently studied by the department.
Source: Manila Bulletin