Manila: The goal of ensuring a reliable domestic power supply throughout the day is one reason the government, with support from the Asian Development Bank (ADB), has established a de-risking facility for geothermal power projects, Energy Secretary Sharon Garin said Thursday night.
According to Philippines News Agency, Garin stated that the Philippines, once the world's second-largest geothermal energy producer, has now slipped to third place. This decline highlights the urgency to attract more investors to the sector. The initiative aligns with the government's objective to increase the share of renewable energy in the country's total supply to 35 percent by 2030 and 50 percent by 2040.
"It (geothermal energy) is a reliable source of energy for the Philippines," Garin expressed during the 50th anniversary celebration of Energy Development Corp. (EDC). In December, a memorandum of agreement was signed between the Department of Energy (DOE) and the Land Bank of the Philippines for the USD170 million Philippine Geothermal Resource De-Risking Facility, funded through a sovereign loan from the Manila-based ADB.
The facility aims to provide capital for geothermal exploration. Successful projects will see the funding treated as a loan, while unsuccessful ones will have the funding considered a grant. "It's a risky project with a lot of benefits," Garin mentioned, emphasizing the need for de-risking to lessen the financial burden on investors such as EDC and other companies involved in geothermal power projects.
Garin also underscored the importance of a reliable domestic power source to mitigate the effects of external oil supply fluctuations, as the country heavily relies on oil imports. She emphasized the need to explore indigenous fuel sources to reduce dependency on imported oil and gas.
In response to questions about the potential establishment of similar facilities for other power projects, Garin noted the challenges involved. She explained that banks are unlikely to pursue such initiatives for fossil-based fuels like oil and gas, highlighting geothermal as a unique, though risky, renewable option.
