DoJ okays foreign ownership on renewable energy
The DoJ noted that foreign ownership restrictions which hamper the flow of investments in the renewable energy sector should be relaxed.
Daily TribuneThe DoJ noted that foreign ownership restrictions which hamper the flow of investments in the renewable energy sector should be relaxed.
The Department of Justice has allowed full foreign ownership in companies undertaking renewable energy development in the country to support the government's bid to achieve energy security.
In its Opinion No. 21 series of 2022 dated 29 September, the DoJ asserted that the exploration, development, and utilization of inexhaustible renewable energy source are not subject to the 60:40 foreign equity limitation as provided under Section 2, Article XII of the Constitution.
The DoJ noted that foreign ownership restrictions which hamper the flow of investments in the renewable energy sector should be relaxed.
It also pointed out that the Constitutional foreign ownership restriction on the exploration, development and utilization of natural resources only covers things that are susceptible to appropriation, thus excluding the sun, the wind and the ocean.
Moreover, the intent of the Constitutional foreign ownership restriction was to preserve for Filipinos limited and exhaustible resources.
However, the DoJ stressed that the Implementing Rules and Regulations of Republic Act 9513 must be amended by the Department of Energy and added that the "appropriation of waters, direct from the source, for power generation" shall continue to be subject to the foreign ownership restriction in the Water Code.
"We express our appreciation to DoJ Secretary Crispin "Boying" Remulla and his legal team for this favorable development which will pave the way for the opening of foreign investments in renewable energy development," Energy Secretary Raphael Lotilla said.
Lotilla added that the DoE will now be addressing the 40 percent equity limit for foreign investors stipulated in the Implementing Rules and Regulation of the RE Law.
"The DoE is preparing the necessary amendments to Rule 6, Section 19 of the IRR of the RE Law," Lotilla said.
Rule 6, Section 19 (B) of the IRR of the RE Law stipulates that "the exploration, development, production and utilization of natural resources shall be under the full control and supervision of the State."
