en.Wedoany.com Reported - The Philippine government has approved a $163.7 million (approximately 10.07 billion Philippine pesos) financing mechanism aimed at reducing the financial risks of geothermal exploration, attracting private investment, and accelerating geothermal development.
The 10th meeting of the Economic Development Committee, chaired by President Ferdinand Marcos Jr., approved the Philippine Geothermal Resource De-Risking Facility (PGRDF), which will establish a government-supported cost-sharing mechanism for exploration drilling.
The Philippine Department of Energy (DOE) stated in a press release that the mechanism targets the most capital-intensive and uncertain phase of geothermal development by sharing exploration costs with developers. Energy Secretary Sharon Garin noted that geothermal development requires substantial investment before delivering a single kilowatt of electricity to consumers, and this mechanism will reduce exploration risks, helping viable projects advance to the development stage.
The DOE said this mechanism supports the government's stated goals of increasing the share of renewable energy in the power generation mix to 35% by 2030 and 50% by 2040. The DOE also pointed out that geothermal energy provides baseload power independent of weather conditions, helping to support grid reliability.
The approval is based on the Geothermal De-Risking Roadmap developed by the DOE in collaboration with the Asian Development Bank in 2022. The DOE stated that the PGRDF translates these efforts into a concrete financing mechanism, helping to accelerate the development of geothermal projects nationwide. At the same time, the mechanism could help the Philippines regain its position among the world's leading geothermal power producers by encouraging more exploration. The Philippines was ranked second globally for many years but was surpassed by Indonesia in geothermal installed capacity in 2018.
Garin said that by reducing exploration risks and moving more projects from uncertainty to confirmation, the country is broadening the pipeline of investable geothermal opportunities, enhancing the resilience of the power system, and reducing exposure to volatile imported fuel prices.
(1 USD = 61.52 PHP)
