The renewable energy (RE) sector has attracted a record-breaking P1.35 trillion in investments to date, driven by the immense potential of the country’s natural resources and the recent liberalization of the market for foreign investors.
To accelerate this momentum, the Department of Energy (DoE) and the Bangko Sentral ng Pilipinas (BSP) work closely with financial institutions to streamline processes and eliminate bureaucratic roadblocks, enabling developers to seize these opportunities with greater speed and efficiency.
“The DoE is committed to work with the private sector and our partner agencies in the national government and local government units (LGUs) to ensure that these approved investments will ripen into beneficial and tangible energy infrastructure for our people,” Energy Secretary Raphael P.M. Lotilla said on Thursday.
Hunt for indigenous power
Lotilla also highlighted the role that banks and financial institutions play in the country’s quest to develop indigenous power resources.
“We are working closely with banks and financial institutions, through the BSP, to align the needs of developers with the objectives of financial institutions to effectively support these projects,” the Secretary said.
Lotilla cited the recent Board of Investments (BoI) report showing that P1.35 trillion in RE investments from January to date has been encouraging. The numbers, according to BoI, already surpassed last year’s P1.26 trillion total.
Investments registered with the BoI enjoy several incentives, including income tax holidays, preferential tax rates, zero VAT, and tax and duty-free importation of capital equipment, raw materials and supplies.
The DoE highlighted that the surge in investments is largely driven by the lifting of foreign ownership restrictions on most RE projects, alongside measures to speed up development.
A key initiative in this effort is the Green Energy Auction Program which promotes competitive pricing for RE and enhances project bankability with a 20-year offtake guarantee.
To further attract investors, the government has simplified the application process for RE development and importation incentives. It has also created opportunities for additional investments within existing contract areas, allowing developers to apply for new contracts, potentially leading to extended terms and incentives for capacity expansion.