Atty. Vina S. Villaroya
The Department of Energy (DOE) in 2019 announced its plan to allocate 2GW of RE generation capacity under a Green Energy Tariff Program (GETP). A draft circular was then issued early this 2020 entitled “Promulgating the Rules and Guidelines Governing the Green Energy Tariff Program in the Philippines.”
Wholesale Electricity Spot Market (WESM).
An anticipated obstacle facing the GETP is the current Philippines’ 40% foreign ownership limit on power projects. From our own experience, many foreign investors have expressed interest in participating in local power projects, but for as long as the constitutional basis of the foreign ownership restriction is not amended, this 40% limit may prove to limit the success of the GETP.
As regards project financing in the renewable energy sector, our experience has been that commercial and private banks exhibited little enthusiasm in financing solar projects previously because they were seen as risky investments. However, between 2017-2019 we saw a rise in private commercial banks taking more of an interest in funding the requirements renewable energy projects. The Projects & Energy Group of MVGS foresees that companies will likely form consortia with others to pursue the 2GW auction, not necessarily because they lack the resources, but because nobody at this point has that much power in terms of capacity in the renewables space to do undertake the endeavor on their own.