The Department of Energy (DOE) is designing low-interest financing models for renewable energy (RE) developers to speed up the hybridization of off-grid areas served by the Small Power Utilities Group (SPUG).

The DOE said Thursday that it convened stakeholders—including National Power Corp. (NPC), Philippine Solar and Storage Energy Alliance, Philippine Hydro, Inc., Wind Energy Development Association of the Philippines, multilateral banks, and RE developers—to kick off the plan. 

“Hybridization of SPUG areas through the integration of RE can bring cleaner, reliable, and more affordable electricity in the long run for the Filipinos who need it most. 

But to make this happen, we need to address and deal with one major challenge — financing,” Energy Undersecretary Rowena Cristina L. Guevara said.

Guevara pointe out that low-interest financing for RE developers would not require sovereign guarantees or standard power supply agreements. 

While shorter contracts under retail competition and open access make the plan ambitious, she said pursuinh the plan could hasten local adoption of clean energy. 

Guevara noted that battery-plus-solar solutions now cost less than the average P18 per kilowatt-hour true cost of generation in SPUG areas while providing environmental benefits. 

“If we consider both the economics and the environmental additionality, it clearly makes sense to put hybridization in our SPUG areas,” she said.

Created under the Electric Power Industry Reform Act of 2001, SPUG generates power in areas not connected to the national grid, where high costs and low demand make private investment difficult.

“SPUG hybridization is not just an energy transition strategy — it is a fiscal strategy, a climate strategy. And most importantly, it is a nation-building strategy,” NPC President and CEO Jericho Jonas Nograles said. 

“NPC stands ready to work with the DOE, our development partners, and the private sector to accelerate hybridization and ensure that no community is left behind,” he added.