Philippines Eyes P60B Geothermal De-Risking; ADB Partnership Renewal Discussed

The Department of Energy (DoE) is ready to tap multilateral banks again to de-risk further geothermal power development, estimating that approximately P60 billion would be required to unlock 2,000 megawatts (MW) of potential capacity. Energy Secretary Sharon S. Garin indicated that the DoE is open to initiating fresh talks with the Asian Development Bank (ADB) for a new de-risking facility. "If we do it properly, and most of these are successful, we won’t have a problem accessing other funds. We have to choose the right projects for this undertaking," Ms. Garin stated on Thursday on the sidelines of the 7th Philippine International Geothermal Conference hosted by the National Geothermal Association of the Philippines. The DoE has already secured P10.7 billion in support from the ADB for the Geothermal Resource De-Risking Facility, which was recently approved by the Economy and Development Council. This facility aims to mitigate financial risks during the exploration phase, which is the most capital-intensive and uncertain stage of project development. The program includes a cost-sharing arrangement for exploratory drilling. The current facility has the potential to reduce the risk of developing around 300 MW of capacity, tapping only a portion of the over 2,000 MW in resources the Philippines is thought to hold. Achieving this target would necessitate at least $12.6 billion in de-risking support, assuming P6 million is required per megawatt to reduce exploration risk. Geothermal energy can serve as a source of baseload power, but exploration requires substantial upfront investments before a resource is confirmed as viable. Ms. Garin highlighted, "Identifying geothermal resources is only the beginning. Bringing them into development requires significant capital, with some of the greatest risks occurring during exploration and drilling, before the commercial viability of a resource is fully established." She emphasized that addressing this early-stage risk is critical to attracting investment and moving prospective resources into development. Currently, the Philippines has 2,057 MW of installed geothermal capacity, accounting for about 6.4% of its power generation in 2025, making it the world's third-largest geothermal producer. Energy Undersecretary Rowena Cristina L. Guevara mentioned that 12 projects are lined up to tap de-risking funds, and the ADB will soon issue a tender for experts to assist the DoE in evaluating applications. Marvin Kenneth S. Bailon, head of business development at geothermal producer Energy Development Corp., confirmed that the company's Amacan geothermal project is being prepared for the facility. "There are other projects, but for now I think what we are preparing for is the immediate project in the pipeline," he told BusinessWorld. — Sheldeen Joy Talavera