The Economy and Development Council has approved a P10.07-billion Philippine Geothermal Resource Derisking Facility, a government-backed financing mechanism to reduce the biggest investment risks in geothermal exploration and unlock more private sector investment in renewable energy.

Approved during the Council's 10th meeting on Tuesday, chaired by President Ferdinand R. Marcos Jr., the facility is designed to address the high upfront costs and exploration uncertainty that have long slowed geothermal development in the country.

By helping absorb part of the financial risks associated with early-stage exploration, the facility is expected to encourage more geothermal projects to move forward, strengthening the country's pipeline of clean energy investments.

The council also approved the Technical Education and Skills Development Authority's P15.76-billion Boosting Employability in Strategic Technical and Vocational Education and Training Sectors project for official development assistance loan financing. 

"As we aim to sustain our upper-middle-income status, one critical aspect is to ensure that we equip Filipinos with the skills aligned with the needs of high-quality jobs. We will maximize this project to build our competitive workforce moving forward," Department of Economy, Planning, and Development Secretary Arsenio Balisacan said.

The Department of Energy (DOE) first tapped the Asian Development Bank in 2022 to develop a geothermal de-risking roadmap for the Philippines, recognizing that exploration remains one of the industry's biggest barriers to investment.

The program seeks to identify, assess, and recommend pre-development risk mitigation strategies for geothermal projects while helping evaluate and prioritize policies and regulations that will support the development of the country's geothermal resources.

The DOE has underscored the need for a de-risking mechanism, noting that geothermal projects require substantial upfront capital and typically take four to six years before reaching commercial operations.

The government's renewable energy roadmap aims to expand installed renewable energy capacity to 52 gigawatts by 2040.